China’s yuan is poised for its longest losing streak on record.
According to the China Foreign Exchange Trade System whose data goes back to 2007, it’s on track for 11 straight sessions of decline, which would be its most prolonged slump.
This comes after the central bank has set its daily reference rate at a stronger than expected level for seven straight days, a sign that the People’s Bank of China is growing uncomfortable with the yuan’s descent, the Bloomberg report says.
Despite the PBOC’s efforts, bearish sentiment is prevailing in the wake of China and the US exchanging escalated tariff threats. On Thursday the currency slipped 0.05 per cent to 7.1683 per US dollar as of 10:19am in Shanghai.
“The steady onshore yuan fixings reflect a stronger PBOC policy signal to stabilize the yuan,” said Ken Cheung, chief Asian FX strategist at Mizuho Bank Ltd, as quoted by Bloomberg. “However, it appears they’re not strong enough given the prevailing yuan sentiment and deadlocked China-US trade talks.”
An escalation in the trade war between China and the US has helped make the yuan the worst-performing currency in Asia since May. It has plummeted by almost 4 per cent in August – set for its biggest monthly drop since January 1994, when the modern exchange-rate regime was adopted. A slowdown in China’s economy has also dented investor confidence.