Chinese yuan fell sharply, US dollar up

The Chinese yuan witnessed a sharp decline at a time when Chinese markets were shaken by the renewed trade war with the United States after returning from the Lunar New Year holiday.

The yuan recorded a marginal rise in offshore transactions to 7.2835 per dollar on Wednesday, recovering from a sharp drop to a record level of 7.3765 per dollar at the beginning of the trading week.

The dollar rose more than 0.5% against the yuan to 7.2863 in onshore transactions, but what limited the gains was the People’s Bank of China (the central bank) setting a higher-than-expected average exchange rate, a rate that allows the currency to trade within a two percent range.

The Canadian dollar recovered from a 22-year low recorded on Monday, reaching 1.4328 in the last transactions. The Mexican peso was stable at 20.4896 per dollar, away from a nearly three-year low reached on Monday of 21.2882.

The pound was up 0.05% at $1.2487, while the euro broke above $1.02 and was last at $1.0385. The Japanese yen jumped on growing bets that the Bank of Japan will hike interest rates further this year.