The onshore yuan fell to the weakest level in 14 years as the dollar strengthened on hawkish comments from a Federal Reserve member and as Covid-led lockdowns in parts of Xi’an intensified growth concerns.
The Chinese currency slumped to 7.2525 per dollar, the lowest since January 2008. That’s after the US currency rose following Philadelphia Fed President Patrick Harker’s comment that the central bank is likely to raise interest rates to “well above” 4% this year and hold them at restrictive levels to combat inflation.
The central bank set a stronger-than-expected yuan fixing for the 37th straight session on Friday to support the currency with the twice-a-decade Communist Party congress currently underway. However, traders expect the People’s Bank of China to loosen its grip on the yuan once the congress ends.
