The yuan weakened to hover around its end-January lows on Monday, after the central bank fixed the softest midpoint against the dollar since 2011 as expectations of a US interest rate hike grow.
Federal Reserve Chair Janet Yellen had said on Friday a rate increase in the coming months “would be appropriate,” if the economy and labour market continued to improve.
The dollar index, which traces the greenback against a basket of major currencies, rose 0.4 per cent on Friday and extended its gains, standing at 95.904 by midday in Asian trade.
The People’s Bank of China set the midpoint rate at 6.5784 per dollar prior to the market open, 0.45 per cent weaker than the previous fix of 6.549 and the softest fixing since February 2011.
The spot market opened at 6.5764 per dollar and was changing hands at 6.5808 at midday, 158 pips softer than the previous close.