SHANGHAI, April 26 (Reuters) – China’s sliding yuan has been hitting the weak end of the band in so-called cash settlement transactions this week, making it challenging for banks and businesses on the mainland to transact, traders say.
Under unrelenting pressure from rising U.S. yields and outflows from China, the yuan is at five-month lows against the dollar and has been declining to near its 2% policy band limit each day.
finance.yahoo.com/news/chinas-yuan-hits-downside-limit-070804693.html
This suggests that the yuan is facing significant pressure due to rising U.S. yields and capital outflows from China, leading to its depreciation against the dollar. The yuan’s decline is approaching the lower limit of its permitted trading band, indicating high demand for dollars and potential panic in the market. This situation could have spillover effects on bond and equity markets, amplifying concerns about financial stability and prompting investors to react nervously.
h/t mark000