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How is the Chinese yuan holding up against the US dollar after sliding on Monday?


Leon Mathias

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The Chinese yuan edged about a quarter percent lower versus the greenback on Tuesday, extending its decline versus the US currency for the third straight session. With the US threatening to raise tariffs to 25-percent on Chinese goods from Friday, markets are closely watching to see how Beijing would react as the country’s top negotiator, Vice Premier Liu He heads to Washington this week for further discussions on the trade deal.

Earlier on Tuesday, the Chinese Central Bank cut its official yuan midpoint by 0.4 percent or 270 pips to 6.7614 to the dollar, below Reuters estimates of a 6.7517 fix and the lowest in more than 2-months. In the meanwhile, analysts’ expect the yuan to slip further in the near-term since the 25-percent hike in import tariffs is not priced into the currency as yet, which could push the RNB close to 7.00 in the event of the tariff is implemented.

At 07.30 AM GMT on Tuesday, the USDCNH pair was trading at 6.7858, down about 0.23 percent after settling 0.54 percent lower at 6.7700 in the previous session.

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