Chinese yuan 'fix' at lowest since 2008 amid heightened US tensions

Robert Guy

The People's Bank of China has set the daily "fix" for the Chinese yuan at its lowest rate against the US dollar since 2008.

China's central bank fixed the yuan at 0.38 per cent lower at 7.1209 against the US dollar, the lowest since early 2008, as trade and geopolitical tensions between Beijing and Washington continue to escalate.

The US President has previously attacked China over the value of its currency. Bloomberg

Traders have sold off the yuan this morning, pushing it to 7.1367 against the US dollar—the lowest since October. The yuan is allowed to trade within a 2 per cent band around the fix.

The weaker currency will give China's exporters a boost at a time when the country's major export markets are in the early stages of recovering from a contraction in growth caused by COVID-19.

However, it will exacerbate tensions between the US after President Donald Trump snubbed talks with China's President Xi Jinping over growing frustration with China's progress on meeting its obligations under the phase one trade deal inked in January.

Beijing's handling of the epidemic and its proposed national security laws have also inflamed tensions.