The Chinese yuan lost value Tuesday against the world's reserve currency as a consequence of the People's Bank of China guiding the weakening monetary unit, The Wall Street Journal reports.
But the losses to the monetary unit of the globe's second largest economy were minimized by selling of the dollar. The central bank of China set a central parity rate between the renminbi and the greenback, which was higher than it had been one day prior. The PBOC also increased the parity rate higher than it had been on Monday.
"If the central bank refuses to let the yuan rise further via the central parity, we may see investor sentiment change [to favoring the dollar] in a while," a trader with a foreign bank based in Shanghai told The Wall Street Journal.
As of recent weeks, the Chinese currency has slimmed down its losses against the world's reserve currency 0.4 percent since 2012 began. However, since July, losses between the two nations' monetary units climbed as high as 1.6 percent.
The dollar index, a measure of value of the world's reserve currency compared against six rival currencies, increased from Monday to Tuesday, according to Reuters.
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