Yuan at the Mercy of Overseas Traders Puts China on Alert

The onshore yuan is set to end a miserable month and things could get even worse for its less-regulated offshore exchange rate as China goes on a one-week holiday.

The currency traded in Shanghai is on track for a seventh month of losses, matching a record run during the height of the US-China trade war four years ago. Historical volatility for the yuan in the past week spiked to a level unseen since 2020 as the exchange rate gets caught between two opposing forces: a surge in the dollar and Beijing’s attempts to clamp down on speculation.