SHANGHAI- China’s yuan hovered near a two-week low against the dollar on Monday as upbeat manufacturing data partially offset some investor worries over heightened Sino-US trade tensions after President Donald Trump proposed extra tariffs on Chinese goods.
Trump’s additional 10 percent tariffs on Chinese goods will come into effect on March 4, while China is studying relevant countermeasures, state-backed Global Times said on Monday.
Trade tensions had been one of the key drags on the yuan during Trump’s first term as the president, when a series of tit-for-tat US China tariff announcements drove the Chinese currency down more than 12 percent against the dollar between March 2018 and May 2020.
However, market sentiment in morning deals was slightly improved as China’s manufacturing activity expanded at the fastest pace in three months in February, an official factory survey showed.
As of 0351 GMT, the onshore yuan weakened 0.11 percent to 7.2881 per dollar, compared with a two-week low of 7.2914 hit on Friday.
Its offshore counterpart traded at 7.2965 per dollar around midday
Prior to the market opening, the People’s Bank of China (PBOC) set the midpoint rate around which the yuan is allowed to trade in a 2 percent band, at 7.1745 per dollar, its weakest level since January 20 but 1,112 pips firmer than a Reuters’ estimate of 7.2857. —
