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China sets its yuan midpoint weaker Friday

Posted August. 10, 2019 07:01,   

Updated August. 10, 2019 07:01


China’s central bank raised the official midpoint reference for the yuan yet again on Friday, which broke a psychologically important level of 7 per dollar Thursday for the first time in 11 years since May 2008.

The People’s Bank of China set the yuan’s daily midpoint at 7.0136 per dollar, a 0.14 percent increase from Thursday’s rate of 7.0039 yuan per dollar. The yuan’s rate against the greenback has risen for seven consecutive trading days since last Wednesday.

With China apparently weakening its local currency in response to trade pressure, the United States has also revealed another set of sanctions. The U.S. Department of Commerce announced Thursday (local time) the affirmative preliminary determination of the countervailing duty (CVD) investigation of imports of wooden cabinets and vanities from China, The Associated Press reported. Countervailing duty laws protect businesses and workers from the unfair pricing of subsidized imports. The United States imported wooden cabinets and vanities from China worth around 4.41 billion U.S. dollars (about 5.3 trillion won) last year.

The Department of Commerce also said that according to its investigation, Chinese exporters received countervailable subsidies ranging from 10.97 to 229.24 percent and that it will collect cash deposits from importers of wooden cabinets and vanities from China. The U.S. International Trade Commission (ITC) is scheduled to make its final CVD determination on Jan. 30, 2020.

Washington has also held off “on a decision about licenses for U.S. companies to restart business with Huawei Technologies Co.,” according to a report from Bloomberg. U.S. Commerce Secretary Wilbur Ross had said last Tuesday that a decision on American businesses’ requests to resume sales could be made by next week.