China’s currency fell further this week, reflecting heightened investor caution about the nation’s slowing economic growth and an intensifying trade conflict with the U.S.
The yuan USDCNH, +0.0532% hit 6.9725 per dollar in offshore trading on Friday, its weakest in nearly two years. The currency has fallen against the greenback each day this week, and on Thursday sank past a prior low from August. The yuan extended declines Friday after China lowered the currency’s daily trading range against the dollar for onshore trading.
After a nearly 7% selloff so far this year, the yuan is at the brink of hitting 7 per dollar—a symbolic threshold that could spark further selling—if Chinese businesses and individuals decide this means they need to expatriate capital ahead of any further decline. The yuan last traded lower than 7 per dollar in May 2008 in the onshore market, while offshore trading was only introduced in 2010.
The currency weakness comes during a roller-coaster week for global markets. Chinese stocks jumped early in the week but reversed course sharply, factoring into a selloff that hit the U.S. market particularly hard on Wednesday. American benchmarks rebounded on Thursday, recouping some losses. Stocks in mainland China and Hong Kong were mixed Friday morning.
Meanwhile, the U.S. dollar, as gauged by the ICE U.S. Dollar Index DXY, +0.10% which measures the greenback against six rivals, was mostly flat at 96.632, pulling back from a 10-week high hit Thursday amid weakness in the euro EURUSD, -0.1758%
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