Stock Exchange :

China sets the yuan midpoint at 7.0039 per dollar, weakest since April 2008

Key Points
  • Investors are watching the number closely after the currency breached an important 7-yuan-per-dollar level on Monday for the first time since the 2008 global financial crisis.
  • Economists polled by Reuters had expected the People's Bank of China to set the yuan at 7.0205 per dollar on Thursday. The yuan midpoint was set at 6.9996 per dollar on Wednesday.

Chinese yuan notes.
Jie Zhao | Corbis News | Getty Images

China's central bank on Thursday set the official reference rate for the Chinese currency at 7.0039 yuan per dollar — the weakest level since April 21, 2008.

Investors are watching the yuan closely after the currency breached an important 7-yuan-per-dollar level on Monday for the first time since the 2008 global financial crisis. That prompted the U.S. Treasury department to label Beijing a currency manipulator.

Wednesday's yuan midpoint was the first time since 2008 that the reference rate was weaker than 7 per dollar, according to Reuters. A weaker yuan makes Chinese exports more attractive, and the Trump administration has complained it's giving Beijing a trade advantage.

Economists polled by Reuters had expected the People's Bank of China to set the yuan at 7.0205 per dollar on Thursday. The yuan midpoint was set at a stronger level of 6.9996 per dollar on Wednesday.

China allows the yuan to trade within a narrow band of 2% from each day's midpoint.

The onshore yuan was changing hands at 7.0423 per dollar on Thursday, while the offshore yuan was trading at 7.0678 against the greenback.

The U.S. and China are embroiled in a months-long trade dispute that escalated last week when President Donald Trump surprised markets by announcing that new tariffs on another $300 billion of Chinese goods will come into effect on Sept. 1. Global markets tanked on that news amid signs that the tariff dispute could drag on.

This is a breaking news story. Please check back for updates.

source: CNBC

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