The Chinese yuan slipped on Friday against the U.S. dollar after the People's Bank of China provided guidance that drew down the monetary unit of the globe's second-largest economy, The Wall Street Journal reports.
Also pulling down the yuan was the strengthening U.S. dollar, the currency of the globe's largest economy. But the Chinese currency is forecast to recover in the short term since demand for it typically increases as the quarter draws to a close.
"A big Chinese bank started dumping dollars, and smaller players followed the wave, pushing the rate below 6.30. Actually the euro was already falling, but people weren't focused on that," a trader at an Asian bank in Shanghai told The Economic Times, noting the yuan often tracks the euro. "When the big banks come out to play, people tend to think it represents the central bank's intention. But in the afternoon, the market stepped back and started to consider things rationally."
China caused concerns to mount about the global economy when it released weak economic data on Thursday.
The yuan's Friday session began with losses but in the afternoon it reversed that trend and gained, according to The Economic Times.