The offshore yuan USDCNH, +0.9087% hit a session low at 6.9184 versus the dollar, down 1.2%, which would mark its worst session since Aug. 11, 2015, according to Dow Jones Market Data.
Furthermore, the yuan has fallen more than 1% daily just three times since 2010.
The yuan was under pressure at the start of Asian trading hours on Monday, but losses accelerated when China announced it would place tariffs on $60 billion worth of U.S. goods. The announcement came after the U.S. increased tariffs on $200 billion of goods to 25% from 10% on Friday.
“I still think they’ll come to some sort of deal in the coming months, but if it goes full monty and the next $300 billion happens then we will see a further lurch lower and it will definitely come into play,” said Boris Schlossberg, managing director of currency strategy at BK Asset Management, speaking of the psychological 7.00 level in the U.S. dollar and Chinese yuan trade pair.
The yuan is around 1.3% from hitting 7.00 versus the U.S. dollar.
The Invesco DB US Dollar Index Bullish Fund (UUP) was trading at $26.15 per share on Monday afternoon, down $0.00 (0.00%). Year-to-date, UUP has gained 8.82%, versus a 5.88% rise in the benchmark S&P 500 index during the same period.
UUP currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #1 of 16 ETFs in the Currency ETFs category.
This article is brought to you courtesy of MarketWatch.
