China's yuan hovers near key level amid intervention speculation

HONG KONG (July 3): Chinese banks were seen selling dollars after the yuan weakened past a key level, stoking speculation that authorities were seeking to slow the losses.

The yuan was 0.5% lower at 6.6981 per dollar at 11:31 a.m. in Shanghai after earlier falling to 6.7204. Some Chinese major banks sold the dollar in the swaps market, according to four traders. A Bloomberg survey last week found observers expected the People’s Bank of China would act to slow the descent at 6.7.

China’s currency has retreated more than 4% against the greenback since June 14, the most among 31 major currencies tracked by Bloomberg. A failure to contain the tumble will feed speculation officials are effectively depreciating the yuan to defend against the effects of trade tariffs.

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