The controlled yuan continued to slide Tuesday, but the pace of the decline slowed. One dollar last bought $ 7.0200 yuan in China and 7.0490 yuan in the offshore market, where the currency trades more freely.
But the feeling is nevertheless better.
Equity investors also consoled the Chinese central bank announcing plans to issue central bank bills worth 30 billion yuan next week. It supported China's currency, which rebounded slightly against the dollar after the announcement.
"Also supporting the markets is likely to hunt for companies with good fundamentals and short coverage elsewhere," Forex.com technical analyst Fawad Razaqzada wrote in a
But now the markets are moving.
Investors feared that the label would eliminate China's incentive to keep the yuan above the 7: 1 dollar ratio, triggering a currency war with the United States. A further devaluation of the yuan may ease the burden of US tariffs on China. Wall Street fears that a sharp fall in the yuan could escalate the trade war, prompting the US to raise its tariffs for China or seize on the value of the US dollar.