Both the onshore and offshore yuan are bleeding today
The onshore yuan has now weakened to more than 6.87 per dollar, the first time breaching that level since 4 January. This comes as markets continue to favour haven flows as risk aversion continues to prevail in trading today.
Meanwhile, the offshore yuan looks set for its biggest daily loss in nine months against the dollar as USD/CNH rises above 6.90:
This will certainly raise some eyebrows as we start moving into the much talked about territory of the 7.00 handle. Trade tensions are likely to continue to weigh on the yuan as China vows to retaliate but I reckon if we move closer towards 7.00, there will be intervention talks so I would expect market participants to also take money off around those levels.