The offshore yuan hit its all-time historic low before registering a modest rebound as U.S.-China tensions continue rising.
After reaching an overnight record-low of 7.1966 per U.S. dollar, the offshore yuan (CNH) registered a modest rebound. As of publishing, USDCNH was around 7.17.
«The door is open for US President Trump to rescind Hong Kong's special status and hurt its position as an international financial center but no one is sure if and when this will happen,» UBS said in a note.
High Degree of Autonomy No More
According to U.S. Secretary of State Michael Pompeo, Hong Kong no longer enjoys the same levels of autonomy as before.
«Hong Kong does not continue to warrant treatment under United States laws in the same manner as U.S. laws were applied to Hong Kong before July 1997,» Pompeo said in a statement. «No reasonable person can assert today that Hong Kong maintains a high degree of autonomy from China, given facts on the ground.»
With the yuan absorbing most of the impact since trade tensions peaked in 2019, markets are seeing increasing chances for the People’s Bank of China to allow currency depreciation, according to ING strategists in a note.
