Anna 
On Tuesday, the Chinese yuan experienced a decline, with the USDCNY pair climbing 0.1% to 7.2178, marking its highest level since mid-November. Similarly, the offshore yuan’s USDCNH pair dipped 0.1%, remaining notably above the psychologically significant 7.2 level.
Despite the People’s Bank of China (PBOC) setting a stronger-than-expected midpoint and reportedly instructing local banks to bolster the yuan by selling dollars on the open market, the currency continued to weaken.
Recent declines in the yuan can be attributed to growing concerns regarding China’s economic recovery trajectory. Additionally, the PBOC’s indication of potential interest rate cuts to stimulate the economy has further dampened sentiment, exacerbating the yuan’s downward trend. Notably, the yuan ranks among the worst-performing Asian currencies over the past two years.
As the yuan’s weakness persists, there is a possibility of heightened intervention by the PBOC. Beijing’s increasing discomfort with the yuan’s depreciation could lead to more aggressive measures to stabilize the currency.
