The offshore yuan fell over 7.18 against the dollar, reaching a four-week low. This drop is due to bets that China will ease policies to boost its struggling economy. China’s economy is facing deflation and a slow recovery after the pandemic. Markets expect cuts in lending rates and another reserve requirement ratio reduction soon.
Investors also watch China’s trade, inflation, and fourth-quarter GDP updates. A strong dollar rebound, with fewer expected US rate cuts, also pushed the yuan down.