BEIJING (AP) — China’s yuan has fallen to its lowest level this year against the dollar following President Donald Trump’s threat of new tariffs on Chinese goods, coming close to breaking the politically sensitive level of seven to the U.S. currency.
The yuan fell to 6.950 to the dollar, its lowest level since December, on Friday but recovered slightly by midday.
Trump’s tariff hikes in a fight over China’s trade surplus and technology ambitions has put downward pressure on the yuan by fueling concern about China’s economic growth.
Chinese leaders have promised to avoid “competitive devaluation” to boost exports by making them less expensive abroad. But regulators are trying to make the state-controlled exchange rate more responsive to market forces, which are pushing the yuan lower.