China’s central bank set the daily midpoint for the yuan at its weakest level since 2008 early Thursday.
The People’s Bank of China set the yuan’s CNYUSD, +0.1930% reference point at 7.0039 against one U.S. dollar, according to Dow Jones Newswires. The bank allows the yuan to fluctuate up to 2% higher or lower than that level.
Reuters reported it was the weakest midpoint since April 21, 2008, and also the first time since 2008 that the midpoint has been weaker than 7 per dollar. The yuan’s midpoint had been set at 6.9996 per dollar on Wednesday.
Still, Thursday’s move was not as weak as some had expected, heartening investors that China was not trying to start an all-out currency war. Asian markets and U.S. futures were largely unfazed by Thursday’s move.
A weakening of the yuan below the critical 7 level on Monday sent global markets tumbling amid fears it was the first step in a currency war. A weaker yuan makes China’s exports more inexpensive, harming foreign competition.
On Monday, the U.S. Treasury Department labeled China a currency manipulator for the first time since 1994.