A Bloomberg report quoting sources showed Chinese officials ordered state-owned banks to intervene more in the currency market this week to curb yuan volatility. The Bloomberg sources also said that senior Chinese authorities are contemplating reducing banks' foreign-exchange reserve requirements to slow currency depreciation.

China orders banks to intervene to stem Yuan's fall | World Business Watch

Asia-pacific markets are surging ahead of anticipated business activity data and inflation reports from various countries in the region.

Bolivia joins de-dollarisation bandwagon

The dragon seems to have lost its roar at the Chinese Yuan sleep to a seven-month low. This comes against the backdrop of China cutting key lending benchmarks disappointment over the lack of stimulus measures to boost economic growth and the overall strength of the dollar was weighed heavily on the Chinese currency. The offshore Yuan dropped below 7.2 percent per dollar hitting a level not seen since late last year now while China's Central Bank implemented modest interest rate cuts to support the economy.

China's Yuan vs Dollar: China's Yuan on a slippery slope as it hits 7-month low

The rival between the United States and china has taken yet another turn after US treasury department kept China, along with six other countries, in the 'monitoring list' for potential currency manipulation. While the US fell short of calling China 'a currency manipulator', it did raise concerns around Xhina's opaque exchange rate policy.

Yuan in US-China crossfire

The yuan was used in 48.4% of all cross-border transactions, Reuters calculated, while the dollar's share declined to 46.7% from 48.6% a month earlier. The volume of cross-border transactions covers both the current and capital accounts.

Yuan overtakes dollar to become most-used currency in China's cross-border transactions

Trade with sanctioned Russia is helping China's currency, reports say that Yuan has become 5th most traded currency in the world. China's currency was up three places to number five in bank for international settlements.

World Business News: Yuan becomes 5th most traded currency, surpasses Australian, Canadian dollar

Asian equities fell to new 2.5 year lows on Tuesday as early gains inspired by a rally on Wall Street on hopes the Federal Reserve could be nearing the end of aggressive rate increases were offset by weakness in Chinese shares and the Yuan.

WION Business News | Asian stocks ease 2.5 year-low, Pound lifted by Sunak's victory

In a boost for China, its currency surpassed the US dollar for the first time this week. It makes Yuan the most traded foreign currency on Moscow Exchange. The western sanctions have pushed Russia closer to China.

Chinese Yuan surpasses dollar, becomes most traded foreign currency on the Moscow Exchange

Financial messaging system SWIFT has laid out its blueprint for a global central bank digital currency (CBDC) network following an eight-month experiment on different technologies and currencies.

The trial, which involved France and Germany's national central banks as well as global lenders like HSBC, Standard Chartered and UBS, looked at how CBDCs could be used internationally and even converted into fiat money if needed.

Around 90 per cent of the world's central banks are now using, trialling or looking into CBDCs. Most don't want to be left behind by bitcoin and other cryptocurrencies, but are grappling with technological complexities.

SWIFT's head of innovation Nick Kerigan said its trial, which will be followed by more advanced testing over the next year, resembled a bicycle wheel where 14 central and commercial banks in total connected spoke-like into its main hub.

The idea is that once scaled up, banks may need only one main global connection, rather than thousands if they were to set up connections with each counterpart individually.

"We believe that the number of connections needed is much fewer," Kerigan said. "Therefore, you are likely to have fewer breaks (in the chain) and you are likely to achieve greater efficiency."

The trial also tested different underlying CBDC technologies known as Distributed Ledger Technologies. The use of various technologies has also been raised as a potential hurdle for rapid global adoption.

There was a separate trial too carried out alongside Citi, clearing house Clearstream and Northern Trust on 'tokenised' assets, traditional assets like stocks and bonds transformed into digital tokens that can then be issued and traded in real-time.

Some countries such as the Bahamas and Nigeria already have CBDC's up and running. China is well advanced with real-life trials of an e-yuan, while central bank umbrella group, the Bank for International Settlements has also been running cross-border trials.

SWIFT's main advantage though is that its existing network is already usable in over 200 countries and connects more than 11,500 banks and funds.

The Belgium-based firm has gone from being virtually unknown outside banking circles to a household name this year after it cut most of Russia's banks off from its network as part of the West's sanctions for the country's invasion of Ukraine.

Kerigan said that kind of move could also happen in a new CBDC system, but doubted whether it would stop countries from joining one.

"Ultimately what most central banks are looking to do is to provide us with a CBDC for the people, the businesses and the organisations in their jurisdiction."

"So a solution that's fast and efficient and that gains access to as many other countries as possible would seem to be an attractive one."

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Financial messaging system SWIFT has laid out its blueprint for a global central bank digital currency (CBDC) network following an eight-month experiment on different technologies and currencies.

Financial messaging system SWIFT has laid out its blueprint for a global central bank digital currency (CBDC) network following an eight-month experiment on different technologies and currencies. The trial, which involved France and Germany's national central banks as well as global lenders like HSBC, Standard Chartered and UBS, looked at how CBDCs could be used internationally and even converted into fiat money if needed. Around 90 per cent of the world's central banks are now using, trialling or looking into CBDCs. Most don't want to be left behind by bitcoin and other cryptocurrencies, but are grappling with technological complexities. SWIFT's head of innovation Nick Kerigan said its trial, which will be followed by more advanced testing over the next year, resembled a bicycle wheel where 14 central and commercial banks in total connected spoke-like into its main hub. The idea is that once scaled up, banks may need only one main global connection, rather than thousands if they were to set up connections with each counterpart individually. "We believe that the number of connections needed is much fewer," Kerigan said. "Therefore, you are likely to have fewer breaks (in the chain) and you are likely to achieve greater efficiency." The trial also tested different underlying CBDC technologies known as Distributed Ledger Technologies. The use of various technologies has also been raised as a potential hurdle for rapid global adoption. There was a separate trial too carried out alongside Citi, clearing house Clearstream and Northern Trust on 'tokenised' assets, traditional assets like stocks and bonds transformed into digital tokens that can then be issued and traded in real-time. Some countries such as the Bahamas and Nigeria already have CBDC's up and running. China is well advanced with real-life trials of an e-yuan, while central bank umbrella group, the Bank for International Settlements has also been running cross-border trials. SWIFT's main advantage though is that its existing network is already usable in over 200 countries and connects more than 11,500 banks and funds. The Belgium-based firm has gone from being virtually unknown outside banking circles to a household name this year after it cut most of Russia's banks off from its network as part of the West's sanctions for the country's invasion of Ukraine. Kerigan said that kind of move could also happen in a new CBDC system, but doubted whether it would stop countries from joining one. "Ultimately what most central banks are looking to do is to provide us with a CBDC for the people, the businesses and the organisations in their jurisdiction." "So a solution that's fast and efficient and that gains access to as many other countries as possible would seem to be an attractive one." WATCH WION LIVE HERE:

After a 8-month experiment, SWIFT lays out blueprint for central bank digital currency network

China’s currency yuan slipped to a 14-year low against the US dollar and also hit a record low in the international trading market on Wednesday, despite the country’s central bank’s best efforts to stem the flow.

The Chinese currency fell to 7.2 to the dollar in the international market for the time since a separate currency trading system was established outside mainland China over a decade ago.

In the onshore markets as well, the yuan depreciated to 7.2 to the dollar, its lowest level since January 2008.

The People’s Bank of China issued a statement on Wednesday evening in a bid the calm the nerves of the investors, stating that it is strictly monitoring the market movements.

“The foreign exchange market is of great importance, and maintaining its stability is the top priority,” it stated.

The bank urged investors not to bet on the unilateral appreciation or depreciation of the yuan, and called on regional banks to curb such activity.

It also said some companies have been engaging in currency speculation or flouting regulations, without giving details.

Also read |&nbsp;<a href="https://www.wionews.com/world/as-pound-slips-bank-of-england-steps-into-buy-bonds-and-restore-parity-520510">As pound slips, Bank of England steps in to buy bonds and restore parity</a>

The yuan “has withstood the test of many rounds of external shocks…You will lose if you keep betting”, it said.

The slide of the Chinese currency follows the US interest rate hikes which prompted traders to convert money into dollars in search of higher returns.

Also read |&nbsp;<a href="https://www.wionews.com/world/pound-hits-all-time-low-against-dollar-as-liz-truss-tax-cuts-come-under-pressure-519650" target="_blank">Pound hits all-time low against dollar as Liz Truss' tax cuts come under pressure</a>

A weaker currency generally augurs well for the Chinese exporters as it makes goods cheaper abroad, but it can also lead to investors pulling their money out of the country.

Apart from China, there have been many Asian markets which saw their currency fall against the dollar, after US Fed hiked interest rates.

Last week, the Bank of Japan intervened to support the yen for the first time since 1998, after the currency weakened against the dollar.

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China’s currency yuan slipped to a 14-year low against the US dollar and also hit a record low in the international trading market on Wednesday, despite the country’s central bank’s best efforts to stem the flow.

China’s currency yuan slipped to a 14-year low against the US dollar and also hit a record low in the international trading market on Wednesday, despite the country’s central bank’s best efforts to stem the flow. The Chinese currency fell to 7.2 to the dollar in the international market for the time since a separate currency trading system was established outside mainland China over a decade ago. In the onshore markets as well, the yuan depreciated to 7.2 to the dollar, its lowest level since January 2008. The People’s Bank of China issued a statement on Wednesday evening in a bid the calm the nerves of the investors, stating that it is strictly monitoring the market movements. “The foreign exchange market is of great importance, and maintaining its stability is the top priority,” it stated. The bank urged investors not to bet on the unilateral appreciation or depreciation of the yuan, and called on regional banks to curb such activity. It also said some companies have been engaging in currency speculation or flouting regulations, without giving details. Also read | As pound slips, Bank of England steps in to buy bonds and restore parity The yuan “has withstood the test of many rounds of external shocks…You will lose if you keep betting”, it said. The slide of the Chinese currency follows the US interest rate hikes which prompted traders to convert money into dollars in search of higher returns. Also read | Pound hits all-time low against dollar as Liz Truss' tax cuts come under pressure A weaker currency generally augurs well for the Chinese exporters as it makes goods cheaper abroad, but it can also lead to investors pulling their money out of the country. Apart from China, there have been many Asian markets which saw their currency fall against the dollar, after US Fed hiked interest rates. Last week, the Bank of Japan intervened to support the yen for the first time since 1998, after the currency weakened against the dollar. WATCH WION LIVE HERE:

China’s yuan slides to record 14-year low against US dollar

Amid fears of a global slowdown compounded by investors' risk aversion to equity markets, Rupee tumbled to a new low on Monday. Reportedly, the Indian currency fell 38 paise to hit an all-time low of 81.

Amid fears of a global slowdown compounded by investors' risk aversion to equity markets, Rupee tumbled to a new low on Monday. Reportedly, the Indian currency fell 38 paise to hit an all-time low of 81.47 against the US greenback before closing the day at 81.6225 per dollar. Notably, the rupee had reached a low of 81.22 on Friday, prompting the Reserve Bank of India (RBI) to quickly sell dollars. Consequently, the rupee had a little breather. The Indian rupee taking a beating comes in the backdrop of a hawkish US Fed hiking interest rates by 75 basis points to 3-3.25 per cent last week. This was the third straight time that the Fed had announced a hike, primarily meant to arrest the sky-inflation rates in the country. However, it instantly lead to a mismatch in the global economies. The two major currencies in Asia, the yen and the yuan have tumbled as well due to investors fearing that the Asian market may experience crisis-level stress once again. Read more: Indian rupee hits new low, slips below 81-mark against US dollar for the first time ever It is pertinent to note that most major currencies across the globe have been struggling and depreciating against the US dollar. Speaking on the currency fluctuation, Union Finance Minister Nirmala Sitharaman last week stated that Indian Rupee 'held up very well' against the US dollar when compared to other currencies. "If any one currency which has held its own and did not get into fluctuation or volatility as much as other currencies, it is the Indian rupee. We have held back very well," said Sitharaman. The RBI Monetary Policy Committee (MPC) meeting is scheduled to be held later this week. The investors are keeping a close eye on the developments that come from the meeting. However, the sentiment leading to the meeting is rather downbeat amongst the investors. Experts believe that the rupee will tumble as risk-off sentiment takes the dollar index to 113.70 and sterling to 1.0557 against the dollar. Read more: Pound hits all-time low against dollar as Liz Truss' tax cuts come under pressure (With inputs from agencies) WATCH WION LIVE HERE:

Rupee tumbles to a new record low. Closes at 81.62 per dollar

China’s central bank has sent a strong signal it wants to keep the Chinese yuan from weakening too quickly against the U.S. dollar by reducing the amount of foreign currency banks need to hold. Molly Gambhir tells you what this move means for Beijing.

WION Fineprint | Why China’s central bank is shoring up the Yuan

An Indian cement manufacturer recently purchased Russian coal by paying with the yuan currency with the help of India’s biggest private bank, HDFC Bank, news agency Reuters reported.

The main aim of the report was not to pinpoint that the purchase breaches the sanctions imposed by the West on Russia in the wake of the Ukrainian invasion.&nbsp;Rather it seeks to highlight the various ways Russia can sell items abroad without heavily relying on the US dollar.

Citing an invoice dated June 5 and a source familiar with the matter, Reuters reported that HDFC Bank backed cement maker Ultratech's purchase of Russian coal from producer and trader SUEK for 172.7 million yuan ($25.74 million).

The HDFC Bank’s Mumbai branch of Andheri East issued the letter of credit for the deal, according to the invoice.

The dollar is the currency of choice for global trade in raw materials, but some traders say the yuan could be increasingly used to settle payments for supplies from Russia.

In the invoice, SUEK requests Ultratech remit the 172.7 million yuan to SUEK's account at the Shanghai branch of China Everbright Bank. SUEK lists the Hong Kong branch of international lender HSBC as the correspondent bank. &nbsp;A correspondent bank acts as a middleman in the transfer of money from one bank to another.

Reuters could not determine if a payment had been received by China Everbright or if HSBC or any other bank was involved in a transfer of funds. HDFC Bank and HSBC declined to comment. Ultratech, SUEK and China Everbright Bank did not respond to requests for comment.&nbsp;

It was not clear from the invoice which currencies were used to effect the yuan payment. The amount listed was quoted in Chinese yuan and Reuters reported last week that Ultratech imported 157,000 tonnes of coal from Switzerland-registered SUEK and agreed to settle the final payment in that currency.

Greater use of the yuan to settle payments could help insulate Moscow from punishment and bolster Beijing's push to further internationalise the yuan and chip away at the dominance of the U.S. dollar in global trade.

(With inputs from agencies)

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&nbsp;

An Indian cement manufacturer recently purchased Russian coal by paying with the yuan currency with the help of India’s biggest private bank, HDFC Bank, news agency Reuters reported.

An Indian cement manufacturer recently purchased Russian coal by paying with the yuan currency with the help of India’s biggest private bank, HDFC Bank, news agency Reuters reported. The main aim of the report was not to pinpoint that the purchase breaches the sanctions imposed by the West on Russia in the wake of the Ukrainian invasion. Rather it seeks to highlight the various ways Russia can sell items abroad without heavily relying on the US dollar. Citing an invoice dated June 5 and a source familiar with the matter, Reuters reported that HDFC Bank backed cement maker Ultratech's purchase of Russian coal from producer and trader SUEK for 172.7 million yuan ($25.74 million). The HDFC Bank’s Mumbai branch of Andheri East issued the letter of credit for the deal, according to the invoice. The dollar is the currency of choice for global trade in raw materials, but some traders say the yuan could be increasingly used to settle payments for supplies from Russia. In the invoice, SUEK requests Ultratech remit the 172.7 million yuan to SUEK's account at the Shanghai branch of China Everbright Bank. SUEK lists the Hong Kong branch of international lender HSBC as the correspondent bank. A correspondent bank acts as a middleman in the transfer of money from one bank to another. Reuters could not determine if a payment had been received by China Everbright or if HSBC or any other bank was involved in a transfer of funds. HDFC Bank and HSBC declined to comment. Ultratech, SUEK and China Everbright Bank did not respond to requests for comment. It was not clear from the invoice which currencies were used to effect the yuan payment. The amount listed was quoted in Chinese yuan and Reuters reported last week that Ultratech imported 157,000 tonnes of coal from Switzerland-registered SUEK and agreed to settle the final payment in that currency. Greater use of the yuan to settle payments could help insulate Moscow from punishment and bolster Beijing's push to further internationalise the yuan and chip away at the dominance of the U.S. dollar in global trade. (With inputs from agencies) WATCH WION LIVE HERE

Indian cement maker used yuan to purchase Russian coal: Report

The US dollar was down slightly on Monday after hitting a 20-year peak last week, with the global economy in focus after the Chinese yuan came under pressure following weak data.

Creating a risk-off mood on Monday, China`s retail and factory activity fell sharply in April as extensive COVID-19 lockdowns confined workers and consumers to their homes. The offshore Chinese yuan was down against the dollar, holding near a September 2020 low of 6.8380 yuan hit last week.

Following the release of China`s data, Bipan Rai, North America head of FX Strategy at CIBC Capital Markets, said trading was focused on macro economic data.

"It`s important to highlight that the risks are towards a stronger dollar and primarily, that`s because if you look at the macro economic climate, the fundamentals don`t look good. From a risk-off perspective that should still support the dollar against most currencies," Rai said.

But he said the greenback was consolidating after its recent strength and that more range-bound trading sessions were possible: "It makes sense for some period of consolidation before the next leg higher."

The euro was pulled from its earlier lows after European Central Bank policymaker Francois Villeroy de Galhau said the common currency`s weakness could threaten the ECB`s efforts to steer inflation towards its target.

The Australian dollar, which is highly exposed to the Chinese economy, reversed course as the day wore on and was last up against the dollar after falling as much as 0.9%.

The dollar index was last down 0.11%, after having briefly crossed the 105 level on Friday - its highest level since December 2002, after six successive weeks of gains.&nbsp;

Weekly positioning data showed investors built their long dollar bets.

The euro was marginally higher at $1.0414, but not far from last week`s low of $1.0354, its lowest level since early 2017. Analysts see $1.0340 as a crucial level of euro support.

HSBC strategists expect the euro to fall to parity against the dollar in the coming year. "Much weaker growth and much higher inflation leave the ECB facing one of the toughest policy challenges in G10 (central banks)," they said.

Crypto markets, which trade around the clock, had a quiet weekend after turmoil last week driven by TerraUSD, a so-called stablecoin, which broke its dollar peg. An affiliate of the company behind TerraUSD said it had spent the bulk of its reserves trying to defend its dollar peg and would use the remainder to try to compensate some users who had lost out.

Bitcoin was last trading at around $29,647, down more than 5%, after having dropped to $25,400 on Thursday, its lowest mark since December 2020.

The US dollar was down slightly on Monday after hitting a 20-year peak last week, with the global economy in focus after the Chinese yuan came under pressure following weak data.

The US dollar was down slightly on Monday after hitting a 20-year peak last week, with the global economy in focus after the Chinese yuan came under pressure following weak data. Creating a risk-off mood on Monday, China`s retail and factory activity fell sharply in April as extensive COVID-19 lockdowns confined workers and consumers to their homes. The offshore Chinese yuan was down against the dollar, holding near a September 2020 low of 6.8380 yuan hit last week. Following the release of China`s data, Bipan Rai, North America head of FX Strategy at CIBC Capital Markets, said trading was focused on macro economic data. "It`s important to highlight that the risks are towards a stronger dollar and primarily, that`s because if you look at the macro economic climate, the fundamentals don`t look good. From a risk-off perspective that should still support the dollar against most currencies," Rai said. But he said the greenback was consolidating after its recent strength and that more range-bound trading sessions were possible: "It makes sense for some period of consolidation before the next leg higher." The euro was pulled from its earlier lows after European Central Bank policymaker Francois Villeroy de Galhau said the common currency`s weakness could threaten the ECB`s efforts to steer inflation towards its target. The Australian dollar, which is highly exposed to the Chinese economy, reversed course as the day wore on and was last up against the dollar after falling as much as 0.9%. The dollar index was last down 0.11%, after having briefly crossed the 105 level on Friday - its highest level since December 2002, after six successive weeks of gains. Weekly positioning data showed investors built their long dollar bets. The euro was marginally higher at $1.0414, but not far from last week`s low of $1.0354, its lowest level since early 2017. Analysts see $1.0340 as a crucial level of euro support. HSBC strategists expect the euro to fall to parity against the dollar in the coming year. "Much weaker growth and much higher inflation leave the ECB facing one of the toughest policy challenges in G10 (central banks)," they said. Crypto markets, which trade around the clock, had a quiet weekend after turmoil last week driven by TerraUSD, a so-called stablecoin, which broke its dollar peg. An affiliate of the company behind TerraUSD said it had spent the bulk of its reserves trying to defend its dollar peg and would use the remainder to try to compensate some users who had lost out. Bitcoin was last trading at around $29,647, down more than 5%, after having dropped to $25,400 on Thursday, its lowest mark since December 2020.

Dollar slips from 2-decade highs; yuan falls on weak China data

Already a front-runner in developing central bank digital currencies (CBDC), China on Tuesday said that it will continue to develop digital yuan (eCNY) and improve its design. Yi Gang, Governor of People's Bank of China made a statement to this effect. He was addressing a Bank of Finland event via video conferencing

"Going forward, we will continue to prudently advance R&amp;D of eCNY, improve its design and use," said Yi Gang.

China is already testing digital yuan in major cities like Shenzhen, Beijing and Shanghai. However, no timetable for its official rollout has been set.

Also Read | <a href="https://www.wionews.com/business-economy/chinese-property-developer-kaisa-misses-payment-worrying-investors-426713">Chinese property developer Kaisa misses payment, worrying investors</a>

China will improve eCNY's privacy protection and anti-counterfeiting feature and increase its interoperability with existing payments tools, Yi Gang said.

China will test eCNY's impact on its monetary policy and financial markets, he added.

Yi also said eCNY aims to meet the need of domestic retail payments as cross-border digital payments involve more complicated issues, such as anti-money laundering.

(With inputs from agencies)

Already a front-runner in developing central bank digital currencies (CBDC), China on Tuesday said that it will continue to develop digital yuan (eCNY) and improve its design.

Already a front-runner in developing central bank digital currencies (CBDC), China on Tuesday said that it will continue to develop digital yuan (eCNY) and improve its design. Yi Gang, Governor of People's Bank of China made a statement to this effect. He was addressing a Bank of Finland event via video conferencing "Going forward, we will continue to prudently advance R&D of eCNY, improve its design and use," said Yi Gang. China is already testing digital yuan in major cities like Shenzhen, Beijing and Shanghai. However, no timetable for its official rollout has been set. Also Read | Chinese property developer Kaisa misses payment, worrying investors China will improve eCNY's privacy protection and anti-counterfeiting feature and increase its interoperability with existing payments tools, Yi Gang said. China will test eCNY's impact on its monetary policy and financial markets, he added. Yi also said eCNY aims to meet the need of domestic retail payments as cross-border digital payments involve more complicated issues, such as anti-money laundering. (With inputs from agencies)

China to continue developing digital yuan, says central bank governor

In China's commercial hub Shanghai, six big state banks are quietly promoting digital yuan ahead of a May 5 shopping festival, carrying out a political mandate to provide consumers with a payment alternative to Alipay and WeChat Pay.

The banks are persuading merchant and retail clients to download digital wallets so that transactions during the pilot programme can be made directly in digital yuan, bypassing the ubiquitous payment plumbing laid by tech giants Ant Group, an affiliate of Alibaba 9988.HK, and Tencent 0700.HK.

China's development of a sovereign digital currency, which is far ahead of similar initiatives in other major economies, looks increasingly poised to erode the dominance of Ant Group's Alipay and Tencent's WeChat Pay in online payments.

That turf encroachment coincides with Beijing's expanding effort to clamp down on anticompetitive behaviour in the internet sector, part of a wider reining in of the clout of sector heavyweights.

Regulators scuppered Ant's record $37 billion IPO in November and earlier this month imposed a sweeping restructuring on the fintech conglomerate controlled by Jack Ma. Ma's Alibaba Group Holdings was recently hit with a record $2.8 billion antitrust penalty.

In public, the People's Bank of&nbsp;China&nbsp;(PBOC) says e-CNY won't compete with AliPay or WeChat Pay, and serves only as a "backup" or "redundancy". (Full Story)

But in private, state banks marketing the digital fiat currency for the central bank bluntly describe Beijing's intention to undercut the duo's dominance.

"Big data is wealth. Whoever owns data thrives," said a banking official tasked with promoting the e-CNY.

"WeChat Pay and Alipay own an ocean of data," so the e-CNY rollout facilitates&nbsp;China's anti-trust campaign and helps the government control big data, he added.

Ant declined to comment on the relationship between Alipay and e-CNY. Ant-backed MYbank said it is "one of the parties participating in the research and development" of the e-CNY, and "will steadily advance the trial pursuant to the overall arrangement of the People's Bank of&nbsp;China."

Digital cash

The e-CNY digitalises a portion of&nbsp;China's physical notes and coins, or currency in circulation (M0), and was launched last year in small pilot schemes in four cities.

Under a two-tier distribution system, the PBOC issues the digital currency to banks, which pass the money to individuals and companies.

The six banks in the e-CNY pilot schemes include&nbsp;China's biggest lenders such Industrial and Commercial Bank of&nbsp;China, Agricultural Bank of&nbsp;China, Bank of&nbsp;China, and&nbsp;China&nbsp;Construction Bank.

"The e-CNY's ease of use will likely be comparable to Alipay and WeChat Pay, while its security function will likely be higher, and as sophisticated as Bitcoin," HSBC wrote in a recent report, adding that it expects the digital currency to "proliferate" within&nbsp;China.

Among a slew of likely motivations cited by HSBC behind the push is the central bank's desire to gain control of payment channels and consumption data from Alipay and WeChat Pay.

Conspicuously absent 
Digital wallets, which are still being beta tested, can be bundled with a dozen popular apps including Meituan, JD.com, Didi and Bilibili, but conspicuously can not be linked to WeChat or Alipay. That means none of the participating banks can transfer e-CNY between their digital wallets and the two established payment platforms.

"PBOC doesn't want to see the money being routed through third-party payment systems," a banker said, citing the need for "information segregation".

The e-CNY will digitize "the last mile" of consumption, enabling banks and merchants to capture data and gain insights into spending patterns, said Wilson Chow, Global TMT Leader, PwC&nbsp;China.

That data is now dominated by Alipay and WeChat Pay, which control a combined 94% of&nbsp;China's online payment market.

Mass adoption of the e-CNY won't happen overnight.

Chow predicts that e-CNY will account for roughly 10% of&nbsp;China's electronic payments market in a few years, co-existing with Alipay and WeChat Pay.

To entice users, bankers said the PBOC will likely give "red envelopes" of free digital cash or discounts to Shanghai citizens around the upcoming shopping festival, an event aimed at promoting spending to fuel economic recovery from COVID-19.

PBOC deputy governor Li Bo told a forum last week that domestic adoption will precede cross-border payments with e-CNY, which many analysts believe will bolster the yuan's global status as&nbsp;China&nbsp;seeks ultimately to break the dominance of the dollar settlement system.

"The priority of the yuan's digitalization is currently to promote its domestic use," Li said.

(With inputs from agencies)

In China's commercial hub Shanghai, six big state banks are quietly promoting digital yuan ahead of a May 5 shopping festival, carrying out a political mandate to provide consumers with a payment alternative to Alipay and WeChat Pay.

In China's commercial hub Shanghai, six big state banks are quietly promoting digital yuan ahead of a May 5 shopping festival, carrying out a political mandate to provide consumers with a payment alternative to Alipay and WeChat Pay. The banks are persuading merchant and retail clients to download digital wallets so that transactions during the pilot programme can be made directly in digital yuan, bypassing the ubiquitous payment plumbing laid by tech giants Ant Group, an affiliate of Alibaba 9988.HK, and Tencent 0700.HK. China's development of a sovereign digital currency, which is far ahead of similar initiatives in other major economies, looks increasingly poised to erode the dominance of Ant Group's Alipay and Tencent's WeChat Pay in online payments. That turf encroachment coincides with Beijing's expanding effort to clamp down on anticompetitive behaviour in the internet sector, part of a wider reining in of the clout of sector heavyweights. Regulators scuppered Ant's record $37 billion IPO in November and earlier this month imposed a sweeping restructuring on the fintech conglomerate controlled by Jack Ma. Ma's Alibaba Group Holdings was recently hit with a record $2.8 billion antitrust penalty. In public, the People's Bank of China (PBOC) says e-CNY won't compete with AliPay or WeChat Pay, and serves only as a "backup" or "redundancy". (Full Story) But in private, state banks marketing the digital fiat currency for the central bank bluntly describe Beijing's intention to undercut the duo's dominance. "Big data is wealth. Whoever owns data thrives," said a banking official tasked with promoting the e-CNY. "WeChat Pay and Alipay own an ocean of data," so the e-CNY rollout facilitates China's anti-trust campaign and helps the government control big data, he added. Ant declined to comment on the relationship between Alipay and e-CNY. Ant-backed MYbank said it is "one of the parties participating in the research and development" of the e-CNY, and "will steadily advance the trial pursuant to the overall arrangement of the People's Bank of China." Digital cash The e-CNY digitalises a portion of China's physical notes and coins, or currency in circulation (M0), and was launched last year in small pilot schemes in four cities. Under a two-tier distribution system, the PBOC issues the digital currency to banks, which pass the money to individuals and companies. The six banks in the e-CNY pilot schemes include China's biggest lenders such Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, and China Construction Bank. "The e-CNY's ease of use will likely be comparable to Alipay and WeChat Pay, while its security function will likely be higher, and as sophisticated as Bitcoin," HSBC wrote in a recent report, adding that it expects the digital currency to "proliferate" within China. Among a slew of likely motivations cited by HSBC behind the push is the central bank's desire to gain control of payment channels and consumption data from Alipay and WeChat Pay. Conspicuously absent Digital wallets, which are still being beta tested, can be bundled with a dozen popular apps including Meituan, JD.com, Didi and Bilibili, but conspicuously can not be linked to WeChat or Alipay. That means none of the participating banks can transfer e-CNY between their digital wallets and the two established payment platforms. "PBOC doesn't want to see the money being routed through third-party payment systems," a banker said, citing the need for "information segregation". The e-CNY will digitize "the last mile" of consumption, enabling banks and merchants to capture data and gain insights into spending patterns, said Wilson Chow, Global TMT Leader, PwC China. That data is now dominated by Alipay and WeChat Pay, which control a combined 94% of China's online payment market. Mass adoption of the e-CNY won't happen overnight. Chow predicts that e-CNY will account for roughly 10% of China's electronic payments market in a few years, co-existing with Alipay and WeChat Pay. To entice users, bankers said the PBOC will likely give "red envelopes" of free digital cash or discounts to Shanghai citizens around the upcoming shopping festival, an event aimed at promoting spending to fuel economic recovery from COVID-19. PBOC deputy governor Li Bo told a forum last week that domestic adoption will precede cross-border payments with e-CNY, which many analysts believe will bolster the yuan's global status as China seeks ultimately to break the dominance of the dollar settlement system. "The priority of the yuan's digitalization is currently to promote its domestic use," Li said. (With inputs from agencies)

Chinese banks promoting digital currency, posing threat to Alipay, WeChat duopoly

China has begun rolling out its digital yuan currency. Reported first by CNBC, e-commerce firm JD dot com had become the first online platform which accepts digital yuan.

China is also set to begin the trials of its digital currency in the city of Suzhou, which lies about 65 miles west of Shanghai.

According to JD Digits, the fintech arm of JD dot com, a total of $3 million (20 million yuan) will be released via a lottery.

Also read:&nbsp;<a href="http://13.235.153.162/business-economy/china-to-launch-pilot-digital-currency-program-in-some-cities-320467" hreflang="en">China to launch pilot digital currency program in some cities</a>

According to reports, the winners would receive a “red packet” through the app containing a maximum of 200 yuan, with a hundred thousand red packets set to be distributed.

Once in circulation, those in possession on the digital yuan would be able to spend it on JD dot com’s online shopping platform.

China has given away large amounts of its currency earlier as well. In October, over 10 million yuan was handed out to citizens in Shenzhen, China’s technology hub.

Also read:&nbsp;<a href="http://13.235.153.162/opinions-blogs/the-race-for-national-digital-currency-is-gaining-momentum-is-india-lagging-behind-299893" hreflang="en">The race for national digital currency is gaining momentum, is India lagging behind?</a>

The digital yuan is controlled and regulated by the People’s Bank of China, and will be known as a central bank digital currency (CBDC).

The project is referred by the central bank as the “Digital Currency Electronic Payment” or DCEP.

In August, it was revealed that four banks would conduct the roll out of Chinese digital currency. These include Bank of China, China Construction Bank, Industrial and Commercial Bank of China, and Agricultural Bank of China, and if these tests are successful, China will become world's country to have a sovereign digital currency.&nbsp;

Also read:&nbsp;<a href="http://13.235.153.162/world/china-passes-cryptography-law-to-gears-up-for-digital-currency-258334" hreflang="en">China passes cryptography law to gear up for digital currency</a>

China's push towards digital currency will strengthen its already dominant digital payments infrastructure, which according to The Brookings Institute, is more advanced than many of its Western counterparts.

Meanwhile, Switzerland-based Bank for International Settlements conducted a survey in 2019 that found that as many as 80 per cent of the world's central banks have shown interest in the idea of developing a sovereign digital currency.&nbsp;

China has begun rolling out its digital yuan currency. Reported first by CNBC, e-commerce firm JD dot com had become the first online platform which accepts digital yuan.

China has begun rolling out its digital yuan currency. Reported first by CNBC, e-commerce firm JD dot com had become the first online platform which accepts digital yuan. China is also set to begin the trials of its digital currency in the city of Suzhou, which lies about 65 miles west of Shanghai. According to JD Digits, the fintech arm of JD dot com, a total of $3 million (20 million yuan) will be released via a lottery. Also read: China to launch pilot digital currency program in some cities According to reports, the winners would receive a “red packet” through the app containing a maximum of 200 yuan, with a hundred thousand red packets set to be distributed. Once in circulation, those in possession on the digital yuan would be able to spend it on JD dot com’s online shopping platform. China has given away large amounts of its currency earlier as well. In October, over 10 million yuan was handed out to citizens in Shenzhen, China’s technology hub. Also read: The race for national digital currency is gaining momentum, is India lagging behind? The digital yuan is controlled and regulated by the People’s Bank of China, and will be known as a central bank digital currency (CBDC). The project is referred by the central bank as the “Digital Currency Electronic Payment” or DCEP. In August, it was revealed that four banks would conduct the roll out of Chinese digital currency. These include Bank of China, China Construction Bank, Industrial and Commercial Bank of China, and Agricultural Bank of China, and if these tests are successful, China will become world's country to have a sovereign digital currency. Also read: China passes cryptography law to gear up for digital currency China's push towards digital currency will strengthen its already dominant digital payments infrastructure, which according to The Brookings Institute, is more advanced than many of its Western counterparts. Meanwhile, Switzerland-based Bank for International Settlements conducted a survey in 2019 that found that as many as 80 per cent of the world's central banks have shown interest in the idea of developing a sovereign digital currency.

China: Digital yuan worth $3 million now being rolled out, marking a global first

For the first time since 2013, the Euro has outpaced the Dollar as payment currency. Euro was the most used currency for global payments in October. What about the Yuan? Molly Gambhir gets you a report.

Gravitas: Euro beats Dollar as payment currency

China’s major state-owned banks have been swapping U.S. dollars for yuan this week, traders said on Thursday, suggesting monetary authorities are trying to rein in the sharply appreciating currency.

Those operations in the onshore currency swap market have caused the value of the yuan to fall in the forwards market, tamping expectations that it will appreciate further and simultaneously making it more expensive for investors to borrow yuan.

Two other traders told Reuters they saw big state banks buying dollars in the onshore spot market during late night trading sessions to effectively prevent the yuan from strengthening too fast.

The yuan CNY=CFXS has appreciated 7% against the dollar since the depths it hit in May, as China's rapid recovery from the coronavirus pandemic and high-yielding markets draw foreign investor inflows.

Traders took the state banks’ action as an official sign that the authorities might not want the Chinese currency to strengthen too much in a short period of time, hurting exports.

“The swap market actions, along with recent policy moves, were all meant to slow down the pace of yuan appreciation,” said one of the traders.

The People’s Bank of China (PBOC) has taken other measures recently to ease the pace of appreciation.

It lowered the reserve requirement ratio for financial institutions when conducting some foreign exchange forwards trading to zero earlier this month..

On Tuesday, the PBOC’s currency trading system suspended a counter-cyclical factor that local banks had been using to massage the value of the yuan’s daily mid-point, effectively removing another tool routinely used to prevent depreciation.

The swaps by the big state banks drove up the one-year premium on dollars CNY1Y=CFXS to as high as 1,700 points this week, implying a 2.5% decline over the next 12 months in the tightly managed yuan.

US election risk

State banks usually act on behalf of the central bank in the country’s foreign exchange market, but they could also trade on their own behalf.

This is not the first time that big state banks are using swaps to affect yuan expectations. They were active in yuan forwards multiple times in the previous two years, using swaps to curb dollar supply as authorities sought to slow the currency’s depreciation.

Their swaps this week caused the onshore yuan to be priced weaker in forwards than its offshore counterpart CNHFWDOR= for the first time since February 2018, according to Refinitiv data.

Ken Cheung, chief Asian FX strategist at Mizuho Bank in Hong Kong, said next week’s U.S. presidential elections posed big uncertainties for the outlook for the yuan, or renminbi.

The election outcome has a particularly strong resonance for China, which has endured higher trade tariffs and a hostile backdrop for its tech firms under U.S. President Donald Trump.

Analysts think a win for Democrat challenger Joe Biden, who is ahead in opinion polls, could mean more predictable trade policies.

Mizuho’s Cheung said a surprise victory for Trump could reverse the yuan’s gains, and the PBOC may not do more for the time being.

“At this stage, excessive policy measures to curb renminbi appreciation expectation could do more harm than good, with the back-and-forth FX policy stance causing market confusion,” Cheung wrote.

China’s major state-owned banks have been swapping U.S. dollars for yuan this week, traders said on Thursday, suggesting monetary authorities are trying to rein in the sharply appreciating currency.

China’s major state-owned banks have been swapping U.S. dollars for yuan this week, traders said on Thursday, suggesting monetary authorities are trying to rein in the sharply appreciating currency. Those operations in the onshore currency swap market have caused the value of the yuan to fall in the forwards market, tamping expectations that it will appreciate further and simultaneously making it more expensive for investors to borrow yuan. Two other traders told Reuters they saw big state banks buying dollars in the onshore spot market during late night trading sessions to effectively prevent the yuan from strengthening too fast. The yuan CNY=CFXS has appreciated 7% against the dollar since the depths it hit in May, as China's rapid recovery from the coronavirus pandemic and high-yielding markets draw foreign investor inflows. Traders took the state banks’ action as an official sign that the authorities might not want the Chinese currency to strengthen too much in a short period of time, hurting exports. “The swap market actions, along with recent policy moves, were all meant to slow down the pace of yuan appreciation,” said one of the traders. The People’s Bank of China (PBOC) has taken other measures recently to ease the pace of appreciation. It lowered the reserve requirement ratio for financial institutions when conducting some foreign exchange forwards trading to zero earlier this month.. On Tuesday, the PBOC’s currency trading system suspended a counter-cyclical factor that local banks had been using to massage the value of the yuan’s daily mid-point, effectively removing another tool routinely used to prevent depreciation. The swaps by the big state banks drove up the one-year premium on dollars CNY1Y=CFXS to as high as 1,700 points this week, implying a 2.5% decline over the next 12 months in the tightly managed yuan. US election risk State banks usually act on behalf of the central bank in the country’s foreign exchange market, but they could also trade on their own behalf. This is not the first time that big state banks are using swaps to affect yuan expectations. They were active in yuan forwards multiple times in the previous two years, using swaps to curb dollar supply as authorities sought to slow the currency’s depreciation. Their swaps this week caused the onshore yuan to be priced weaker in forwards than its offshore counterpart CNHFWDOR= for the first time since February 2018, according to Refinitiv data. Ken Cheung, chief Asian FX strategist at Mizuho Bank in Hong Kong, said next week’s U.S. presidential elections posed big uncertainties for the outlook for the yuan, or renminbi. The election outcome has a particularly strong resonance for China, which has endured higher trade tariffs and a hostile backdrop for its tech firms under U.S. President Donald Trump. Analysts think a win for Democrat challenger Joe Biden, who is ahead in opinion polls, could mean more predictable trade policies. Mizuho’s Cheung said a surprise victory for Trump could reverse the yuan’s gains, and the PBOC may not do more for the time being. “At this stage, excessive policy measures to curb renminbi appreciation expectation could do more harm than good, with the back-and-forth FX policy stance causing market confusion,” Cheung wrote.

Chinese banks seen swapping dollars for yuan in forwards to curb gains: Traders

China wants to be the financial superpower and it is leaving no stone unturned in its quest to replace the U.S. Dollar with the Yuan as the global currency. Where does India stand in this race? On Gravitas Plus, Palki Sharma has the details.

Gravitas Plus: Does the Yuan pose a threat to the U.S. Dollar?

Asia equities extended a global rally on Tuesday, with the US decision to no longer designate China a currency manipulator a further sign of easing tensions between the economic titans.

The Treasury announcement came days before the two sides are due to sign off on the first part of a wider trade agreement that has helped fan a rally in world markets.

It also led to a sell-off in safe-haven assets with the yen at a seven-month low and gold down almost one per cent, while oil was also struggling with the <a href="https://www.wionews.com/opinions/wion-edit-us-iran-conflict-whats-next-273195">US-Iran</a> flare-up seemingly in the rear window for investors.

Asia was given a firm lead from Wall Street, where all three main indexes ended higher with the Nasdaq and S&amp;P 500 hitting fresh records on reports the US was about to remove the manipulator label from China.

<a href="https://www.wionews.com/business-economy/global-stocks-rattled-after-donald-trump-says-no-deadline-on-us-china-trade-deal-266025">Donald Trump</a> accused Beijing in August of weakening its yuan currency "to steal our business and factories", re-stating a long-standing grievance.&nbsp;

But soon after the end of trade on Monday, the Treasury said in its semi-annual report to Congress that the unit had strengthened and Beijing was no longer keeping it artificially weak.

The yuan jumped more than one per cent at one point Tuesday before easing slightly. The currency is up more than four per cent from an 11-year low touched in September.&nbsp;

"The yuan is the purest and best barometer to gauge the market's view on <a href="https://www.wionews.com/opinions/us-china-trade-conflict-lack-of-trust-hobbling-the-ability-to-reach-a-deal-198533">US-China</a> trade tension," said AxiTrader's Stephen Innes. "With the yuan strengthening ahead of the 'phase one' deal signing, it's indicating the potential for further improvement in trade relations."

The US reversal of China's status as a manipulator "is a most precise and definitive de-escalation of trade tension to date and provides a less congested road as we pivot to phase two of the broader trade agreement", he added.

<a href="https://www.wionews.com/sports/more-tokyo-olympic-events-rescheduled-due-to-heat-concern-266444">Tokyo</a> was among the biggest gainers, rising 0.7 per cent by the break as the dollar advanced against the yen owing to a rush out of safety giving a boost to Japan's exporters.

Hong Kong and Shanghai both gained 0.2 per cent, while Singapore put on 0.3 per cent and Seoul 0.7 per cent.

Sydney was up 0.6 per cent, Wellington and Taipei both gained 0.5 per cent and Jakarta put on 0.2 per cent.

Improving confidence also hit gold, which is a popular go-to asset in times of turmoil. The yellow metal last week broke $1,600 for the first time in seven years on the Iran crisis but the lowering of expectations for a conflict with the US has seen it tumble more than four per cent from its recent high.

The improving China-US outlook saw it drop by 0.9 per cent on Tuesday.

As well as Wednesday's signing, investors are also looking forward to corporate earnings season, which kicks off in earnest this week with the release of reports from top banks including Citibank, Goldman Sachs, and JP Morgan.

"Our expectation is a solid earnings season nothing extraordinary but nothing really terrible," Kristina Hooper, chief global market strategist at Invesco told Bloomberg TV.&nbsp;

"The environment is so accommodative that it really is supportive of risk assets, including equities, even if we have a lacklustre earnings season."

Asia equities extended a global rally on Tuesday, with the US decision to no longer designate China a currency manipulator a further sign of easing tensions between the economic titans.

Asia equities extended a global rally on Tuesday, with the US decision to no longer designate China a currency manipulator a further sign of easing tensions between the economic titans. The Treasury announcement came days before the two sides are due to sign off on the first part of a wider trade agreement that has helped fan a rally in world markets. It also led to a sell-off in safe-haven assets with the yen at a seven-month low and gold down almost one per cent, while oil was also struggling with the US-Iran flare-up seemingly in the rear window for investors. Asia was given a firm lead from Wall Street, where all three main indexes ended higher with the Nasdaq and S&P 500 hitting fresh records on reports the US was about to remove the manipulator label from China. Donald Trump accused Beijing in August of weakening its yuan currency "to steal our business and factories", re-stating a long-standing grievance. But soon after the end of trade on Monday, the Treasury said in its semi-annual report to Congress that the unit had strengthened and Beijing was no longer keeping it artificially weak. The yuan jumped more than one per cent at one point Tuesday before easing slightly. The currency is up more than four per cent from an 11-year low touched in September. "The yuan is the purest and best barometer to gauge the market's view on US-China trade tension," said AxiTrader's Stephen Innes. "With the yuan strengthening ahead of the 'phase one' deal signing, it's indicating the potential for further improvement in trade relations." The US reversal of China's status as a manipulator "is a most precise and definitive de-escalation of trade tension to date and provides a less congested road as we pivot to phase two of the broader trade agreement", he added. Tokyo was among the biggest gainers, rising 0.7 per cent by the break as the dollar advanced against the yen owing to a rush out of safety giving a boost to Japan's exporters. Hong Kong and Shanghai both gained 0.2 per cent, while Singapore put on 0.3 per cent and Seoul 0.7 per cent. Sydney was up 0.6 per cent, Wellington and Taipei both gained 0.5 per cent and Jakarta put on 0.2 per cent. Improving confidence also hit gold, which is a popular go-to asset in times of turmoil. The yellow metal last week broke $1,600 for the first time in seven years on the Iran crisis but the lowering of expectations for a conflict with the US has seen it tumble more than four per cent from its recent high. The improving China-US outlook saw it drop by 0.9 per cent on Tuesday. As well as Wednesday's signing, investors are also looking forward to corporate earnings season, which kicks off in earnest this week with the release of reports from top banks including Citibank, Goldman Sachs, and JP Morgan. "Our expectation is a solid earnings season nothing extraordinary but nothing really terrible," Kristina Hooper, chief global market strategist at Invesco told Bloomberg TV. "The environment is so accommodative that it really is supportive of risk assets, including equities, even if we have a lacklustre earnings season."

Asian markets, yuan rise as US-China tensions ease further

World stocks rose to a one-week high on cautious hopes for a rapprochement on trade between Beijing and Washington on Friday, though a perky dollar capped gains with China's yuan softening again, on track for its weakest month in 2-1/2 decades.

World stocks rose to a one-week high on cautious hopes for a rapprochement on trade between Beijing and Washington on Friday, though a perky dollar capped gains with China's yuan softening again, on track for its weakest month in 2-1/2 decades. For most of August global stocks have reeled and fixed income shone as deepening concerns over global trade and clear signs of a slowdown, possibly even a recession, in the global economy loomed large over financial markets. But the mood lifted after US President Donald Trump said some trade discussions were taking place with China on Thursday, with more talks scheduled. China's commerce ministry also said a September round of meetings was being discussed by the two sides, but added it was important for Washington to cancel a tariff increase. The MSCI All-Country World Index climbed 0.3 per cent but is on track for a near 3 per cent decline in August - only the second month the benchmark has spent in the red this year. It is the weakest of August for the index since 2015. European stocks on Friday extended the previous session's gains, with the pan-European STOXX 600 index up 0.3 per cent to trade at a fresh one-month high. "The trade war seesaw has certainly moved back in favour of riskier assets for now, with Trump and China supposedly holding a call yesterday," said Deutsche Bank strategist Jim Reid. Gains were helped by a surge in German real estate firms which saw the country's DAX index add 0.7 per cent. The picture was more mixed in Asia, where Chinese and Hong Kong stock markets dipped in and out of the red. Arrests or detentions of pro-democracy activists in Hong Kong added to investor jitters, with the Chinese-ruled territory facing its first recession in a decade. Japan's Nikkei added 1.2 per cent, while South Korea's KOSPI jumped 1.8 per cent. US futures pointed to a firmer start to the day's trade, with E-Minis for the S&P500 up 0.3 per cent after more than 1 per cent gain on Wall Street overnight. Fixed income markets took a breather on Friday, at the end of a stellar month that has seen prices rally and borrowing costs push deeper and deeper into negative territory. US Treasury yields nudged higher overnight, with the benchmark 10-year Treasury climbing to 1.5349 per cent from a three-year low of 1.443 per cent touched earlier this week. It was still below two-year yields at 1.5419 per cent. Such an inversion was last seen in 2007 and correctly foretold the great recession that followed a year later. Eurozone government bond yields were steady near record lows as data showed the bloc's inflation remained low at 1.0 per cent in August, well below the European Central Bank's target and bolstering expectations for European Central Bank stimulus in September. Germany is considering lowering its corporate tax rate, while the US government is thinking about issuing 50- and 100-year bonds in a bid to steepen the yield curve. Recent economic data has also pointed to a global growth slowdown with business investment, manufacturing activity, and exports all going south across major economies. Investors were focused on a string of economic releases due over the weekend including China's official manufacturing survey, which would provide a good gauge of the real impact from the Sino-US trade war. Glum yuan In currency markets, the dollar nudged to a one month high of 98.609 against a basket of six major currencies. Yet the trade optimism failed to inspire China's yuan, which resumed its decline with spot yuan at 7.1462 against the dollar. The currency is on track for its weakest month since Beijing's currency reform in 1994 after it broke through the key 7 to the dollar level earlier in August. "The yuan move back to 7 and beyond has been a distinct possibility for months. It is clearly down due to the tariffs," said Neil Mellor, senior FX strategist at BNY Mellon in London. "It does help them to some extent to absorb the tariff costs - it is one of the few options they have. The fiscal option is limited after years of excess, and the monetary stimulus has already been unprecedented this year." The Australian dollar, often seen as a proxy bet on the Chinese economy, slipped towards a 10-year trough. Elsewhere, the euro plunged to a one-month low against the dollar, as investors looked for aggressive easing by the European Central Bank and ignored doubts by some policymakers about the need for more stimulus. The Japanese yen stood at 106.40 to the dollar, while the euro was 0.2 per cent down at $1.10395. Sterling was steady at $1.2182 against the dollar ahead of a crucial few days for parliament next week which could even result in a no-confidence motion and a new election. In commodities, spot gold came off recent highs to trade at $1,526 an ounce. Silver was at $18.37 an ounce after hitting its highest level in more than two years. US crude slipped 57 cents to $56.14 a barrel while Brent fell 30 cents to $60.78 a barrel.

Global stocks scale one-week high on trade hopes, yuan softens

China's currency on Monday slid to its lowest point in more than 11 years as concerns over the US trade war and the potential for global recession weighed on markets.

The onshore yuan fell to 7.1487 to the US dollar, its weakest point since early 2008, in Asian trading.

Global economic tensions have intensified in recent days with the US and China raising tariffs on each other's imports, and President Donald Trump calling on US businesses to pull out of China.

The yuan is not freely convertible and the Chinese government limits its movement against the dollar to a two per cent range on either side of a figure that the central bank sets each day to reflect market trends and control volatility.

The People's Bank of China has set that rate steadily weaker in recent weeks and set it on Monday at 7.057 to the dollar.

Allowing the yuan to depreciate makes Chinese exports cheaper and offsets some of the burden of punitive US tariffs.

The yuan breached the key 7.0 threshold against the dollar earlier in August, days after the US announced plans to impose fresh tariffs on Chinese imports from September 1.

The plunge past 7.0 prompted Washington to officially brand Beijing a "currency manipulator".

China's central bank has "resolutely opposed" the label.

China's currency on Monday slid to its lowest point in more than 11 years as concerns over the US trade war and the potential for global recession weighed on markets.

China's currency on Monday slid to its lowest point in more than 11 years as concerns over the US trade war and the potential for global recession weighed on markets. The onshore yuan fell to 7.1487 to the US dollar, its weakest point since early 2008, in Asian trading. Global economic tensions have intensified in recent days with the US and China raising tariffs on each other's imports, and President Donald Trump calling on US businesses to pull out of China. The yuan is not freely convertible and the Chinese government limits its movement against the dollar to a two per cent range on either side of a figure that the central bank sets each day to reflect market trends and control volatility. The People's Bank of China has set that rate steadily weaker in recent weeks and set it on Monday at 7.057 to the dollar. Allowing the yuan to depreciate makes Chinese exports cheaper and offsets some of the burden of punitive US tariffs. The yuan breached the key 7.0 threshold against the dollar earlier in August, days after the US announced plans to impose fresh tariffs on Chinese imports from September 1. The plunge past 7.0 prompted Washington to officially brand Beijing a "currency manipulator". China's central bank has "resolutely opposed" the label.

China's yuan sinks to lowest in 11 years amid trade tension with US

<a href="https://www.wionews.com/world/us-designates-china-a-currency-manipulator-as-yuan-hits-record-low-240948">Volatility in China's yuan </a>since August is a normal market reaction to escalating trade frictions stoked by the United States and was caused, to some extent, by Washington's decision to raise tariffs, a senior Chinese central bank official said.

Zhu Jun, director-general of the People's Bank of China's international department, made the comments on Saturday to a forum held in the northern Chinese province of Heilongjiang.

The <a href="https://www.wionews.com/world/us-to-renew-sanctions-waivers-for-five-iran-nuclear-programs-report-239595">US&nbsp;Treasury Department </a>on Monday labelled China a currency manipulator, hours after China let the yuan drop through a key support level to its lowest point in more than a decade. The moves jolted financial markets, fueling fears of a global currency war.

Days earlier, US President Donald Trump had vowed to impose a 10per cent tariff on $300 billion of Chinese imports from Sept. 1, ending a temporary truce and sharply escalating the trade dispute.

Zhu said that the yuan's move was a normal reaction to Trump's tariff threat.

"The labeling violates basic, common economic sense and international consensus, and is unconvincing," Zhu said, adding that the Chinese economy was resilient and capable of coping with various situations.

The year-long trade war between the world's two largest economies has already spread beyond tit-for-tat tariffs on goods to other areas such as technology, and analysts caution retaliation could widen in scope and severity, weighing further on business confidence and global economic growth.

The yuan lost 1.6per cent against the dollar last week, but there were signs in the last few sessions that authorities were trying to stabilise it.

Volatility in China's yuan since August is a normal market reaction to escalating trade frictions stoked by the United States and was caused, to some extent, by Washington's decision to raise tariffs, a senior Chinese central bank official said.

Volatility in China's yuan since August is a normal market reaction to escalating trade frictions stoked by the United States and was caused, to some extent, by Washington's decision to raise tariffs, a senior Chinese central bank official said. Zhu Jun, director-general of the People's Bank of China's international department, made the comments on Saturday to a forum held in the northern Chinese province of Heilongjiang. The US Treasury Department on Monday labelled China a currency manipulator, hours after China let the yuan drop through a key support level to its lowest point in more than a decade. The moves jolted financial markets, fueling fears of a global currency war. Days earlier, US President Donald Trump had vowed to impose a 10per cent tariff on $300 billion of Chinese imports from Sept. 1, ending a temporary truce and sharply escalating the trade dispute. Zhu said that the yuan's move was a normal reaction to Trump's tariff threat. "The labeling violates basic, common economic sense and international consensus, and is unconvincing," Zhu said, adding that the Chinese economy was resilient and capable of coping with various situations. The year-long trade war between the world's two largest economies has already spread beyond tit-for-tat tariffs on goods to other areas such as technology, and analysts caution retaliation could widen in scope and severity, weighing further on business confidence and global economic growth. The yuan lost 1.6per cent against the dollar last week, but there were signs in the last few sessions that authorities were trying to stabilise it.

Volatility in China's yuan due to escalating US trade friction: Chinese central bank official

Weaponising Yuan: Beijing's double-edged sword

A&nbsp;cautious&nbsp;calm&nbsp;returned to stock markets on Wednesday as softer&nbsp;rhetoric&nbsp;from Washington on the US-China&nbsp;trade&nbsp;war&nbsp;soothed investors, though demand for safe-haven assets underscored lingering anxiety.

Europe's STOXX 600 climbed 0.7%, recovering from a three-day sell-off as investors fled after an escalation in the&nbsp;trade&nbsp;war. MSCI's world equity index, which tracks shares in 47 countries, rose 0.2%.

But gold, the Japanese yen and government debt remained in high demand as investors remained&nbsp;wary of riskier assets.

US shares gained overnight after President Donald Trump downplayed worries of a lengthy&nbsp;trade&nbsp;war&nbsp;and senior adviser Larry Kudlow said Trump's administration is planning to host a Chinese delegation for talks in September. Wall Street futures gauges also rose.

The US administration's remarks marked a shift in tone from recent days when Beijing&nbsp;warned that Washington's labelling China as a currency manipulator on Monday would have severe consequences for the global financial order.

Still, market players voiced caution. Trump's threat to impose additional tariffs on more Chinese products is set to take effect in less than a month.

"There is some&nbsp;cautious&nbsp;buying creeping back in," said Michael Hewson, chief market strategist at CMC Markets. "But if you want that to be sustained you have to look towards September 1, when the new tariffs kick in, and whether or not Trump presses ahead with them."

MSCI's broadest index of Asia-Pacific shares outside Japan was slightly lower.

Also easing the mood were signs that China is intervening to steady the yuan after its recent sharp fall, allaying investor fears of a global currency&nbsp;war.

The US Treasury designated China a currency manipulator on Monday after it allowed the yuan to weaken below 7 per dollar for the first time in over a decade. The US move rattled financial markets and dimmed hopes the&nbsp;trade&nbsp;war&nbsp;was ending.

Since then, China's state banks have been active in the onshore yuan forwards market, tightening dollar supply and supporting the Chinese currency, sources told Reuters.

The yuan still dropped 0.2% to 7.0708 in offshore markets despite the support. The People's Bank of China (PBOC) set its official reference rate at an 11-year low, keeping currency markets on edge.

"We had a little bit of recovery yesterday, but this morning we are seeing that stalling due to the PBOC fixing the dollar-yen higher again," said Thu Lan Nguyen, FX strategist at Commerzbank. "It has caused markets to again be in a bit of a risk-off mode."

Safe Havens in Demand

The skittish mood was underlined by continuing demand for currencies and commodities considered safe havens.

Gold reached a six-year high of $1,489.76 per ounce. The Japanese yen rose 0.2% to 106.27, although that was still some way from levels seen on Monday when the&nbsp;trade&nbsp;war's escalation panicked investors.

The US bonds have also retained much of their gains made in the past week. Ten-year Treasury notes yielded 1.66% per cent, their lowest since 2016, as investors bet on another rate cut by the Federal Reserve in September.

Fixed income markets have benefited from fears the US-China&nbsp;trade&nbsp;war&nbsp;would raise the risk of a global recession, strengthening the case for policy easing by central banks.

Germany's 10-year bond yield fell to record lows deep in negative territory as a bigger-than-expected interest rate cut in New Zealand and weak German data gave further impetus to a rally in bond markets.

German industrial output fell more than expected in June, adding to signs that Europe's biggest economy contracted in the second quarter as its exporters were caught up in&nbsp;trade disputes.

In commodity markets, oil prices slipped, with the potential for damage to the global economy and to fuel demand from the Sino-US&nbsp;trade&nbsp;dispute casting a shadow over the market.

International benchmark Brent crude futures were at $58.79 a barrel by 0759 GMT, down 14 cents, or 0.05%, and trading near seven-month lows.

A cautious calm returned to stock markets on Wednesday as softer rhetoric from Washington on the US-China trade war soothed investors, though demand for safe-haven assets underscored lingering anxiety.

A cautious calm returned to stock markets on Wednesday as softer rhetoric from Washington on the US-China trade war soothed investors, though demand for safe-haven assets underscored lingering anxiety. Europe's STOXX 600 climbed 0.7%, recovering from a three-day sell-off as investors fled after an escalation in the trade war. MSCI's world equity index, which tracks shares in 47 countries, rose 0.2%. But gold, the Japanese yen and government debt remained in high demand as investors remained wary of riskier assets. US shares gained overnight after President Donald Trump downplayed worries of a lengthy trade war and senior adviser Larry Kudlow said Trump's administration is planning to host a Chinese delegation for talks in September. Wall Street futures gauges also rose. The US administration's remarks marked a shift in tone from recent days when Beijing warned that Washington's labelling China as a currency manipulator on Monday would have severe consequences for the global financial order. Still, market players voiced caution. Trump's threat to impose additional tariffs on more Chinese products is set to take effect in less than a month. "There is some cautious buying creeping back in," said Michael Hewson, chief market strategist at CMC Markets. "But if you want that to be sustained you have to look towards September 1, when the new tariffs kick in, and whether or not Trump presses ahead with them." MSCI's broadest index of Asia-Pacific shares outside Japan was slightly lower. Also easing the mood were signs that China is intervening to steady the yuan after its recent sharp fall, allaying investor fears of a global currency war. The US Treasury designated China a currency manipulator on Monday after it allowed the yuan to weaken below 7 per dollar for the first time in over a decade. The US move rattled financial markets and dimmed hopes the trade war was ending. Since then, China's state banks have been active in the onshore yuan forwards market, tightening dollar supply and supporting the Chinese currency, sources told Reuters. The yuan still dropped 0.2% to 7.0708 in offshore markets despite the support. The People's Bank of China (PBOC) set its official reference rate at an 11-year low, keeping currency markets on edge. "We had a little bit of recovery yesterday, but this morning we are seeing that stalling due to the PBOC fixing the dollar-yen higher again," said Thu Lan Nguyen, FX strategist at Commerzbank. "It has caused markets to again be in a bit of a risk-off mode." Safe Havens in Demand The skittish mood was underlined by continuing demand for currencies and commodities considered safe havens. Gold reached a six-year high of $1,489.76 per ounce. The Japanese yen rose 0.2% to 106.27, although that was still some way from levels seen on Monday when the trade war's escalation panicked investors. The US bonds have also retained much of their gains made in the past week. Ten-year Treasury notes yielded 1.66% per cent, their lowest since 2016, as investors bet on another rate cut by the Federal Reserve in September. Fixed income markets have benefited from fears the US-China trade war would raise the risk of a global recession, strengthening the case for policy easing by central banks. Germany's 10-year bond yield fell to record lows deep in negative territory as a bigger-than-expected interest rate cut in New Zealand and weak German data gave further impetus to a rally in bond markets. German industrial output fell more than expected in June, adding to signs that Europe's biggest economy contracted in the second quarter as its exporters were caught up in trade disputes. In commodity markets, oil prices slipped, with the potential for damage to the global economy and to fuel demand from the Sino-US trade dispute casting a shadow over the market. International benchmark Brent crude futures were at $58.79 a barrel by 0759 GMT, down 14 cents, or 0.05%, and trading near seven-month lows.

Cautious calm returns to stock markets as White House softens trade war rhetoric

Four former leaders of the US Federal Reserve have called for the independence of the central bank, saying that the Fed and its chair must be permitted to act in the best interests of the economy, free of short-term political pressures, and, in particular, without the threat of removal or demotion of Fed leaders for political reasons.

In an opinion piece published on The Wall Street Journal on Monday, Paul Volcker, Alan Greenspan, Ben Bernanke and Janet Yellen said that an economy is strongest and functions best when the central bank acts independently and relies solely on sound economic principles and data.

The piece wrote, "Research has shown that monetary policy based on the political (rather than economic) needs of the moment leads to worse economic performance in the long run, including higher inflation and slower growth".

"Even the perception that monetary-policy decisions are politically motivated, or influenced by threats that policymakers won't be able to serve out their terms of office, can undermine public confidence that the central bank is acting in the best interest of the economy. That can lead to unstable financial markets and worse economic outcomes," the piece wrote.

The co-signed article came after US President Donald Trump's criticism of Fed Chairman Jerome Powell last week when he lashed out at Powell for not signalling the start of "a lengthy and aggressive rate-cutting cycle." Trump on Monday urged the Fed to pay attention to his remarks when he falsely accused China of "currency manipulation" on Twitter.

Trump has repeatedly voiced his discontent of the Fed's monetary policy over the past few months and even reportedly discussed an attempt to remove Powell from his position, raising questions about the central bank's independence.

Powell, meanwhile, has repeatedly stressed the Fed's commitment to independence and said he fully intends to serve a four-year term.

Four former leaders of the US Federal Reserve have called for the independence of the central bank, saying that the Fed and its chair must be permitted to act in the best interests of the economy, free of short-term political pressures, and, in particular, without the threat of removal or demotion of Fed leaders for political reasons.

Four former leaders of the US Federal Reserve have called for the independence of the central bank, saying that the Fed and its chair must be permitted to act in the best interests of the economy, free of short-term political pressures, and, in particular, without the threat of removal or demotion of Fed leaders for political reasons. In an opinion piece published on The Wall Street Journal on Monday, Paul Volcker, Alan Greenspan, Ben Bernanke and Janet Yellen said that an economy is strongest and functions best when the central bank acts independently and relies solely on sound economic principles and data. The piece wrote, "Research has shown that monetary policy based on the political (rather than economic) needs of the moment leads to worse economic performance in the long run, including higher inflation and slower growth". "Even the perception that monetary-policy decisions are politically motivated, or influenced by threats that policymakers won't be able to serve out their terms of office, can undermine public confidence that the central bank is acting in the best interest of the economy. That can lead to unstable financial markets and worse economic outcomes," the piece wrote. The co-signed article came after US President Donald Trump's criticism of Fed Chairman Jerome Powell last week when he lashed out at Powell for not signalling the start of "a lengthy and aggressive rate-cutting cycle." Trump on Monday urged the Fed to pay attention to his remarks when he falsely accused China of "currency manipulation" on Twitter. Trump has repeatedly voiced his discontent of the Fed's monetary policy over the past few months and even reportedly discussed an attempt to remove Powell from his position, raising questions about the central bank's independence. Powell, meanwhile, has repeatedly stressed the Fed's commitment to independence and said he fully intends to serve a four-year term.

Former United States Federal leaders call for independence of Central Bank

<a href="https://www.wionews.com/world/us-designates-china-a-currency-manipulator-as-yuan-hits-record-low-240948">China's tumbling yuan</a> steadied on Tuesday as authorities took steps to contain its slide while stocks plunged after Washington labelled Beijing a currency manipulator, marking a sharp escalation in US&nbsp;trade tensions.

The <a href="https://www.wionews.com/business-economy/chinese-yuan-falls-to-weakest-level-against-the-dollar-since-2010-240743">currency has slumped 2.3% over the past three days</a> and broken past the symbolic 7-per-dollar level, pounding stocks and pushing bonds higher as investors feared the yuan's value has become a new front in the US-China trade war.

On Monday, US&nbsp;Treasury Secretary Steven Mnuchin said Washington would designate China a currency manipulator, its first such move since 1994, sending both the onshore and offshore yuan to record lows.

The People's Bank of China's firmer-than-expected yuan fixing on Tuesday helped pull the currency away from these lows as did an announced bond sale in the offshore market, seen as signs authorities wanted to stem the rout.

"(China is) seizing the narrative on the renminbi," said Andy Wong, multi-asset senior investment manager at Pictet Asset Management in Hong Kong.

"Rather than being pressured to signal that 7 is just a psychological level, they are ... saying this is something that we control rather than markets or whatever other pressures."

The yuan dropped to the record low in offshore trade early in Asia, after Mnuchin's announcement, before bouncing to steady around 7.0642 per dollar.

The PBOC fixed the yuan midpoint, which sets the point around which the currency is allowed to trade, at 6.9683 per dollar, firmer than market expectations.

The PBOC's announcement of a sale of 30 billion yuan&nbsp;worth of yuan-denominated bills in Hong Kong also suggested the central bank was soaking up cash to prevent speculative short-selling.

The currency opened onshore trade at 7.0699 per dollar, then firmed to 7.0515 by 0310 GMT. The offshore yuan fell to as low as 7.1397 per dollar before coming back as far as 7.0596.

However, the currency's stabilisation on Tuesday was not enough assuage markets, but did halt their slide by midsession.

The Shanghai Composite Index fell over 2% to 2,733.92, touching its lowest level since February, while Hong Kong's Hang Seng Index hit it's lowest since January before paring some of the losses.

"Renminbi weakening pressure added uncertainty to the stock market and added pressure especially for financials and property companies," said Linus Yip, chief strategist at First Shanghai Securities in Hong Kong

"The PBOC is sending signals that it would like to mitigate RMB depreciation – by fixing dollar/yuan somewhat low, and by announcing to issue offshore bills," said Frances Cheung, a strategist at Westpac.

Chinese policy sources had told Reuters that the currency was allowed to slide so markets could factor in concerns over the tussle between the world's two largest economies, especially after President Donald Trump announced new tariffs last week.

"We think the most important takeaway is the risk of US-China trade war escalating further has increased," UBS Economist Tao Wang said in a note to clients.

"As the trade war escalates further and depreciation pressure on the renminbi intensifies, we expect the dollar/yuan to trade beyond 7 more often in the rest of the year."

China's tumbling yuan steadied on Tuesday as authorities took steps to contain its slide while stocks plunged after Washington labelled Beijing a currency manipulator, marking a sharp escalation in US trade tensions.

China's tumbling yuan steadied on Tuesday as authorities took steps to contain its slide while stocks plunged after Washington labelled Beijing a currency manipulator, marking a sharp escalation in US trade tensions. The currency has slumped 2.3% over the past three days and broken past the symbolic 7-per-dollar level, pounding stocks and pushing bonds higher as investors feared the yuan's value has become a new front in the US-China trade war. On Monday, US Treasury Secretary Steven Mnuchin said Washington would designate China a currency manipulator, its first such move since 1994, sending both the onshore and offshore yuan to record lows. The People's Bank of China's firmer-than-expected yuan fixing on Tuesday helped pull the currency away from these lows as did an announced bond sale in the offshore market, seen as signs authorities wanted to stem the rout. "(China is) seizing the narrative on the renminbi," said Andy Wong, multi-asset senior investment manager at Pictet Asset Management in Hong Kong. "Rather than being pressured to signal that 7 is just a psychological level, they are ... saying this is something that we control rather than markets or whatever other pressures." The yuan dropped to the record low in offshore trade early in Asia, after Mnuchin's announcement, before bouncing to steady around 7.0642 per dollar. The PBOC fixed the yuan midpoint, which sets the point around which the currency is allowed to trade, at 6.9683 per dollar, firmer than market expectations. The PBOC's announcement of a sale of 30 billion yuan worth of yuan-denominated bills in Hong Kong also suggested the central bank was soaking up cash to prevent speculative short-selling. The currency opened onshore trade at 7.0699 per dollar, then firmed to 7.0515 by 0310 GMT. The offshore yuan fell to as low as 7.1397 per dollar before coming back as far as 7.0596. However, the currency's stabilisation on Tuesday was not enough assuage markets, but did halt their slide by midsession. The Shanghai Composite Index fell over 2% to 2,733.92, touching its lowest level since February, while Hong Kong's Hang Seng Index hit it's lowest since January before paring some of the losses. "Renminbi weakening pressure added uncertainty to the stock market and added pressure especially for financials and property companies," said Linus Yip, chief strategist at First Shanghai Securities in Hong Kong "The PBOC is sending signals that it would like to mitigate RMB depreciation – by fixing dollar/yuan somewhat low, and by announcing to issue offshore bills," said Frances Cheung, a strategist at Westpac. Chinese policy sources had told Reuters that the currency was allowed to slide so markets could factor in concerns over the tussle between the world's two largest economies, especially after President Donald Trump announced new tariffs last week. "We think the most important takeaway is the risk of US-China trade war escalating further has increased," UBS Economist Tao Wang said in a note to clients. "As the trade war escalates further and depreciation pressure on the renminbi intensifies, we expect the dollar/yuan to trade beyond 7 more often in the rest of the year."

China's yuan steadies but stocks plunge as trade tensions grow

Global stocks extended already substantial losses on Tuesday as China's yuan currency dropped to an 11-year low after Washington designated Beijing a currency manipulator in a rapid escalation of the US-China trade war.

Safe-haven assets, including bonds and some currencies such as the yen and Swiss franc, benefited as investors scurried to avoid risk.

US Treasury Secretary Steven Mnuchin said on Monday the government had determined that China is manipulating its currency, and that Washington would engage the International Monetary Fund to eliminate unfair competition from Beijing.

"Given the fragile state of markets, this is likely to be viewed as an escalation of the trade war and exacerbate the market sell-off," wrote Steve Englander, head of global G10 FX research at Standard Chartered Bank.

"In market terms, the designation, however meretricious, will likely be seen as a further ramping up of the trade dispute and possibly leading to some reaction by China."

The Trump administration's dramatic move against China hastened the risk aversion seen in global markets this week. On Monday, China let the yuan slide in response to the latest US tariffs, which are expected to further aggravate trade tensions between the world's two largest economies.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.5% to its lowest level since January.

The Shanghai Composite Index retreated 2%.

Japan's Nikkei shed 2.1%, Australian stocks fell 2.3% and South Korea's KOSPI slid 1.6%.

"Following the latest development in the US-China trade war, all the economic views and moves in the currency and equity markets are driven by a 'risk off' mentality, which in turn is boosting bonds," said Kota Hirayama, senior emerging markets economist at SMBC Nikko Securities.

"The fact that US yields are falling sharply even though Federal Reserve Chairman Jerome Powell did not signal further easing explains it all."

S&amp;P 500 futures were down 0.5% in Asian trade. Wall Street's major indexes posted their biggest percentage drop of the year on Monday on concerns about the US-China trade war.

MSCI's All Country World Index, which tracks shares in 47 countries, extended last week's slide and slumped 2.5% to a two-month low on Monday.

The Chinese yuan onshore fell to an 11-year low on Tuesday, brushing 7.0699 per dollar. In a symbolic move, Beijing let the yuan breach 7-per-dollar on Monday for the first time since late 2008.

China's offshore yuan stretched the previous day's slide, weakening to 7.1288, the lowest level since international trading in the Chinese currency began in 2010. It last traded at 7.0945.

The Japanese yen, a perceived safe-haven in times of market turmoil and political tensions, touched a seven-month high of 105.520 per dollar before slipping back to 106.290.

The Swiss franc, another currency sought in times of turmoil, has gained roughly 1% against the dollar this week. It touched a six-week peak of 0.9700 franc per dollar.

Investor demand for other safe-havens such government bonds also remained high as risk aversion gathered momentum.

The 10-year US Treasury yield extended sharp falls overnight and declined to 1.672%, its lowest since October 2016.

Japan's 10-year yield fell to a three-year trough of minus 0.215%.

Brent crude oil futures plumbed a seven-month low of $59.07 per barrel as the trade war raised concerns about lower demand for commodities. Brent last traded at $59.89.

Global stocks extended already substantial losses on Tuesday as China's yuan currency dropped to an 11-year low after Washington designated Beijing a currency manipulator in a rapid escalation of the US-China trade war.

Global stocks extended already substantial losses on Tuesday as China's yuan currency dropped to an 11-year low after Washington designated Beijing a currency manipulator in a rapid escalation of the US-China trade war. Safe-haven assets, including bonds and some currencies such as the yen and Swiss franc, benefited as investors scurried to avoid risk. US Treasury Secretary Steven Mnuchin said on Monday the government had determined that China is manipulating its currency, and that Washington would engage the International Monetary Fund to eliminate unfair competition from Beijing. "Given the fragile state of markets, this is likely to be viewed as an escalation of the trade war and exacerbate the market sell-off," wrote Steve Englander, head of global G10 FX research at Standard Chartered Bank. "In market terms, the designation, however meretricious, will likely be seen as a further ramping up of the trade dispute and possibly leading to some reaction by China." The Trump administration's dramatic move against China hastened the risk aversion seen in global markets this week. On Monday, China let the yuan slide in response to the latest US tariffs, which are expected to further aggravate trade tensions between the world's two largest economies. MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.5% to its lowest level since January. The Shanghai Composite Index retreated 2%. Japan's Nikkei shed 2.1%, Australian stocks fell 2.3% and South Korea's KOSPI slid 1.6%. "Following the latest development in the US-China trade war, all the economic views and moves in the currency and equity markets are driven by a 'risk off' mentality, which in turn is boosting bonds," said Kota Hirayama, senior emerging markets economist at SMBC Nikko Securities. "The fact that US yields are falling sharply even though Federal Reserve Chairman Jerome Powell did not signal further easing explains it all." S&P 500 futures were down 0.5% in Asian trade. Wall Street's major indexes posted their biggest percentage drop of the year on Monday on concerns about the US-China trade war. MSCI's All Country World Index, which tracks shares in 47 countries, extended last week's slide and slumped 2.5% to a two-month low on Monday. The Chinese yuan onshore fell to an 11-year low on Tuesday, brushing 7.0699 per dollar. In a symbolic move, Beijing let the yuan breach 7-per-dollar on Monday for the first time since late 2008. China's offshore yuan stretched the previous day's slide, weakening to 7.1288, the lowest level since international trading in the Chinese currency began in 2010. It last traded at 7.0945. The Japanese yen, a perceived safe-haven in times of market turmoil and political tensions, touched a seven-month high of 105.520 per dollar before slipping back to 106.290. The Swiss franc, another currency sought in times of turmoil, has gained roughly 1% against the dollar this week. It touched a six-week peak of 0.9700 franc per dollar. Investor demand for other safe-havens such government bonds also remained high as risk aversion gathered momentum. The 10-year US Treasury yield extended sharp falls overnight and declined to 1.672%, its lowest since October 2016. Japan's 10-year yield fell to a three-year trough of minus 0.215%. Brent crude oil futures plumbed a seven-month low of $59.07 per barrel as the trade war raised concerns about lower demand for commodities. Brent last traded at $59.89.

Stock losses steepen as US puts yuan in crosshairs

The United States on Monday formally accused <a href="https://www.wionews.com/world/trump-defends-stance-on-china-trade-after-new-tariffs-says-things-are-going-well-240486">China of manipulating </a>its currency, marking the second major escalation in the two countries' spiralling trade war in just 24 hours.

Washington's sudden move came the day China allowed the yuan to fall below 7 to the dollar for the first time in about a decade -&nbsp;provoking US President Donald Trump's ire and <a href="https://www.wionews.com/south-asia/pakistan-looses-3-key-positions-in-world-trade-organisation-240613">sending global equities</a> markets diving into the red.

Wall Street on Monday posted its worst one-day losses of 2019 as hope of any near-term resolution to the year-long trade war between the world's top two economies appeared to slide out of view.

In a Twitter outburst earlier in the day, Trump had angrily accused Beijing of weakening the yuan "to steal our businesses and factories."

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China is intent on continuing to receive the hundreds of Billions of Dollars they have been taking from the U.S. with unfair trade practices and currency manipulation. So one-sided, it should have been stopped many years ago!
— Donald J. Trump (@realDonaldTrump) <a href="https://twitter.com/realDonaldTrump/status/1158407373666566145?ref_src=twsrc%5Etfw">August 5, 2019</a></blockquote>
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US Treasury Secretary Steven Mnuchin, "under the auspices of President Trump, has today determined that China is a<a href="https://www.wionews.com/business-economy/chinese-yuan-falls-to-weakest-level-against-the-dollar-since-2010-240743"> currency manipulator</a>," the Treasury Department said in a statement late Monday.

As a result, Mnuchin will engage the International Monetary Fund "to eliminate the unfair competitive advantage created by China's latest actions," the statement said.

The new designation is largely symbolic, since it calls for consultations with countries found to be manipulating their currencies.

But it could gain teeth if the Commerce Department begins imposing tariffs on countries found to be undervaluing their currencies, as that department said earlier this year it plans to do.

The volley lobbed across the Pacific on Monday was sure to shake the global economy even further, with markets doubtful that either side is willing or able to prevent hostilities from spinning out of control.

Chinese state media also announced Monday that Beijing had suspended purchases of American farm exports, piling pain on US agricultural states already battered by Beijing's retaliation in the trade war.

The yuan's weakening came just days after Trump announced plans to raise tariffs on another $300 billion in Chinese imports starting September 1, accusing Beijing of failing to live up to commitments in trade negotiations.

That would mean virtually all of the roughly $660 billion in goods exchanged annually between China and the United States are subject to trade barriers.

The battle has sapped business confidence and undermined both countries' manufacturing sectors just as the world economy's slowdown worsens.

Activity in the US service sector hit a three-year low last month, survey data showed Monday, confirming a step-down in US economic growth.

Trump's move was also sudden: On the campaign trail, he had loudly pledged to designate China a currency manipulator but his administration had until Monday refrained from doing so.

The Treasury Department had instead kept China on a "monitoring list" of countries subject to close scrutiny due to their currency practices, including in its most recent report released in May.&nbsp;

The yuan is not freely convertible and the government limits its movement against the US dollar to a two per cent range on either side of a central parity rate which the People's Bank of China (PBOC) sets each day to reflect market trends and control volatility.

"It appears that the tariffs hike suggests the return of tit-for-tat moves and a suspension of trade talks, and the PBOC sees no need to keep the yuan stable in the near term," Ken Cheung, a senior currency strategist at Mizuho Bank, told Bloomberg News.

In a statement on Monday morning, the PBOC said the exchange rate against the US dollar had been "affected by unilateralism and trade protectionism measures and the imposition of tariff increases on China."

The central bank said the yuan remained "stable and strong against the basket of currencies" and said it would "resolutely crack down on short-term speculation and maintain stable operation of the foreign exchange market and stabilize market expectations."

It went on to say that it had the "experience, confidence and ability to keep the RMB exchange rate basically stable at a reasonable and balanced level."

Julian Evans-Pritchard, senior China economist with Capital Economics, said the PBOC has "effectively weaponized the exchange rate" by linking the currency with the US trade war.

"Given that their goal is presumably to offset some of the impact from additional US tariffs, they are likely to allow the currency to weaken further, probably by 5-10 per cent over the coming quarters," said Evans-Pritchard.

The United States on Monday formally accused China of manipulating its currency, marking the second major escalation in the two countries' spiralling trade war in just 24 hours.

The United States on Monday formally accused China of manipulating its currency, marking the second major escalation in the two countries' spiralling trade war in just 24 hours. Washington's sudden move came the day China allowed the yuan to fall below 7 to the dollar for the first time in about a decade - provoking US President Donald Trump's ire and sending global equities markets diving into the red. Wall Street on Monday posted its worst one-day losses of 2019 as hope of any near-term resolution to the year-long trade war between the world's top two economies appeared to slide out of view. In a Twitter outburst earlier in the day, Trump had angrily accused Beijing of weakening the yuan "to steal our businesses and factories." China is intent on continuing to receive the hundreds of Billions of Dollars they have been taking from the U.S. with unfair trade practices and currency manipulation. So one-sided, it should have been stopped many years ago! — Donald J. Trump (@realDonaldTrump) August 5, 2019 × US Treasury Secretary Steven Mnuchin, "under the auspices of President Trump, has today determined that China is a currency manipulator," the Treasury Department said in a statement late Monday. As a result, Mnuchin will engage the International Monetary Fund "to eliminate the unfair competitive advantage created by China's latest actions," the statement said. The new designation is largely symbolic, since it calls for consultations with countries found to be manipulating their currencies. But it could gain teeth if the Commerce Department begins imposing tariffs on countries found to be undervaluing their currencies, as that department said earlier this year it plans to do. The volley lobbed across the Pacific on Monday was sure to shake the global economy even further, with markets doubtful that either side is willing or able to prevent hostilities from spinning out of control. Chinese state media also announced Monday that Beijing had suspended purchases of American farm exports, piling pain on US agricultural states already battered by Beijing's retaliation in the trade war. The yuan's weakening came just days after Trump announced plans to raise tariffs on another $300 billion in Chinese imports starting September 1, accusing Beijing of failing to live up to commitments in trade negotiations. That would mean virtually all of the roughly $660 billion in goods exchanged annually between China and the United States are subject to trade barriers. The battle has sapped business confidence and undermined both countries' manufacturing sectors just as the world economy's slowdown worsens. Activity in the US service sector hit a three-year low last month, survey data showed Monday, confirming a step-down in US economic growth. Trump's move was also sudden: On the campaign trail, he had loudly pledged to designate China a currency manipulator but his administration had until Monday refrained from doing so. The Treasury Department had instead kept China on a "monitoring list" of countries subject to close scrutiny due to their currency practices, including in its most recent report released in May. The yuan is not freely convertible and the government limits its movement against the US dollar to a two per cent range on either side of a central parity rate which the People's Bank of China (PBOC) sets each day to reflect market trends and control volatility. "It appears that the tariffs hike suggests the return of tit-for-tat moves and a suspension of trade talks, and the PBOC sees no need to keep the yuan stable in the near term," Ken Cheung, a senior currency strategist at Mizuho Bank, told Bloomberg News. In a statement on Monday morning, the PBOC said the exchange rate against the US dollar had been "affected by unilateralism and trade protectionism measures and the imposition of tariff increases on China." The central bank said the yuan remained "stable and strong against the basket of currencies" and said it would "resolutely crack down on short-term speculation and maintain stable operation of the foreign exchange market and stabilize market expectations." It went on to say that it had the "experience, confidence and ability to keep the RMB exchange rate basically stable at a reasonable and balanced level." Julian Evans-Pritchard, senior China economist with Capital Economics, said the PBOC has "effectively weaponized the exchange rate" by linking the currency with the US trade war. "Given that their goal is presumably to offset some of the impact from additional US tariffs, they are likely to allow the currency to weaken further, probably by 5-10 per cent over the coming quarters," said Evans-Pritchard.

US designates China a currency manipulator as yuan hits record low

China's decision to lower the value of renminbi has angered the United States which has accused Beijing of manipulating its currency. Washington's sudden move came the day China allowed the yuan to fall below 7 to the dollar for the first time in about a decade - provoking US President Donald Trump's ire and sending global equities markets diving into the red.

So what exactly is currency manipulation? To put it simply, a country indulges in currency manipulation when it artificially lowers the value of its own currency. In turn, it lowers the cost of its exports to gain a competitive advantage.

The move will help maintain the attractiveness of Chinese goods, and keep its exports at a favourable prices.

The US called it an unfair practice; in fact Washington has threatened to impose more tariffs on Chinese goods from September 1. But Beijing said it lowered the value of its currency to balance out the adverse impact of high US tariffs on Chinese exports.

On the positive side, currency devaluation strengthens the sales and revenue of domestic industry. But on the negative side, due to high import cost, people may choose not to buy imported goods, which could lead to inflation or sometimes monopoly in the local market.

An immediate impact of currency devaluation by China could be felt by Indian exporters. If Chinese exports become more attractive, it will make it that much more difficult for Indian exports.

The Indian rupee is already trading higher, at 70.80 per dollar.

Some Asian countries could follow suit by lowering their own currencies which would potentially affect the global supply chain.

The second major battle between the US and China - amid the trade war - has sapped business confidence and undermined both countries' manufacturing sectors just as the world economy's slowdown worsens.

Activity in the US service sector hit a three-year low last month, survey data showed Monday, confirming a step-down in US economic growth.

China's decision to lower the value of renminbi has angered the United States which has accused Beijing of manipulating its currency. Washington's sudden move came the day China allowed the yuan to fall below 7 to the dollar for the first time in about a decade - provoking US President Donald Trump's ire and sending global equities markets diving into the red.

China's decision to lower the value of renminbi has angered the United States which has accused Beijing of manipulating its currency. Washington's sudden move came the day China allowed the yuan to fall below 7 to the dollar for the first time in about a decade - provoking US President Donald Trump's ire and sending global equities markets diving into the red. So what exactly is currency manipulation? To put it simply, a country indulges in currency manipulation when it artificially lowers the value of its own currency. In turn, it lowers the cost of its exports to gain a competitive advantage. The move will help maintain the attractiveness of Chinese goods, and keep its exports at a favourable prices. The US called it an unfair practice; in fact Washington has threatened to impose more tariffs on Chinese goods from September 1. But Beijing said it lowered the value of its currency to balance out the adverse impact of high US tariffs on Chinese exports. On the positive side, currency devaluation strengthens the sales and revenue of domestic industry. But on the negative side, due to high import cost, people may choose not to buy imported goods, which could lead to inflation or sometimes monopoly in the local market. An immediate impact of currency devaluation by China could be felt by Indian exporters. If Chinese exports become more attractive, it will make it that much more difficult for Indian exports. The Indian rupee is already trading higher, at 70.80 per dollar. Some Asian countries could follow suit by lowering their own currencies which would potentially affect the global supply chain. The second major battle between the US and China - amid the trade war - has sapped business confidence and undermined both countries' manufacturing sectors just as the world economy's slowdown worsens. Activity in the US service sector hit a three-year low last month, survey data showed Monday, confirming a step-down in US economic growth.

Explained: What is currency manipulation and how China's move can impact India

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