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 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.
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