The Chinese yuan edged lower against the dollar on Thursday, marking its weakest point in recent months.
The central parity rate, officially set by the China Foreign Exchange Trade System, fell six pips to 7.1174, reflecting a slight depreciation for the renminbi.
This dip comes amid a broader strengthening of the U.S. dollar, fueled by expectations of further interest rate hikes by the Federal Reserve.
As the global reserve currency, the dollar’s ascent tends to weigh on other currencies, including the yuan.
However, the yuan’s decline remains relatively modest within the allowed trading band of two percent above or below the central parity rate.
This flexibility allows Chinese authorities to manage the currency’s value and maintain stability in the foreign exchange market.
Despite the depreciation, analysts believe the yuan’s outlook for the year remains cautious.
China’s ongoing economic recovery and potential policy measures to boost domestic consumption could provide some support for the currency. Additionally, any easing of geopolitical tensions could further stabilise the yuan’s performance.
(NAN)
