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USD/CNY: Yuan Drop Belies More Trouble Ahead for China
The Chinese yuan has paused for a breather after a five-day losing streak that pushed it to the lowest since November 2022 against the U.S. dollar. The respite comes after the People’s Bank of China (PBOC) stepped up efforts to counter weakness by setting the daily exchange rate “fix” at a stronger level than the markets expected. China’s foreign exchange (FX) management system is a complex web with multiple currency benchmarks. The on-shore USD/CNY spot rate used to transact within the mainland economy is allowed to trade in a band of +/- 2% around a daily “fixing” rate defined by the China Foreign ... (full story)