# China's yuan weakens but falling yen points to risk recovery

> The offshore yuan fell to a seven-week low against the dollar on Monday before trimming losses. China's central bank unexpectedly cut reverse repo rates by 10 basis points and injected 1.2 trillion yuan of liquidity after markets reopened from the Lunar New Year break.

- Date: 2020-02-03 · published 2020-02-03T12:00:00.000Z
- Category: macro · region China · magnitude medium
- Page: https://feedsoft.ai/events/5135-china-s-yuan-weakens-but-falling-yen-points-to-risk-recovery
- Commodities: [Chinese Yuan (CNY per USD)](https://feedsoft.ai/c/USDCNY.md), [Japanese Yen (JPY per USD)](https://feedsoft.ai/c/USDJPY.md)

## Why it matters

Yuan weakness and policy easing point to a weaker Chinese currency that raises the dollar cost of imported feed. Stimulus expectations support broader Chinese demand over time.

## Read by commodity

- USDCNY: bullish ▲
- USDJPY: bearish ▼

## Linked price moves

| Commodity | Date | Window | Change % | z-score | Why linked |
| --- | --- | --- | --- | --- | --- |
| USDCNY | 2020-02-03 | 1 | +1.5% | 7.3 | Offshore yuan hit a seven-week low as the PBoC unexpectedly cut reverse repo rates and injected liquidity, weakening the currency on the Monday reopening. |
| USDCNY | 2020-02-03 | 5 | +1.5% | 2.8 | The offshore yuan fell to a seven-week low on reopening after the unexpected reverse repo rate cut and 1.2 trillion yuan injection, which lowered yuan yields and added to depreciation pressure. |

## Similar past events

| Commodity | Date | Event | 5-day % | 20-day % |
| --- | --- | --- | --- | --- |
| USDCNY | 2022-05-11 | [How PBOC might respond to China's weakening yuan](https://feedsoft.ai/events/10987-how-pboc-might-respond-to-china-s-weakening-yuan.md) | +0.0% | -0.8% |
| USDCNY | 2018-07-30 | [China's falling yuan stokes currency tensions](https://feedsoft.ai/events/64267-china-s-falling-yuan-stokes-currency-tensions.md) | +0.3% | -0.1% |
| USDCNY | 2022-07-27 | [China’s yuan weakens as Fed looms, property, COVID weigh - Markets - Business Recorder](https://feedsoft.ai/events/40700-china-s-yuan-weakens-as-fed-looms-property-covid-weigh-markets-business-recorder.md) | -0.2% | +1.3% |
| USDCNY | 2023-06-04 | [China's yuan may slip further to aid economic recovery - analysts](https://feedsoft.ai/events/35717-china-s-yuan-may-slip-further-to-aid-economic-recovery-analysts.md) | +0.6% | +2.2% |
| USDCNY | 2023-12-11 | [China’s yuan weakens to 3-week low, hurt by deflation signs - Markets - Business Recorder](https://feedsoft.ai/events/6455-china-s-yuan-weakens-to-3-week-low-hurt-by-deflation-signs-markets-business.md) | -0.7% | +0.0% |

## Sources

- cnbc.com: https://www.cnbc.com/2020/02/03/forex-markets-chinese-yuan-australian-dollar-china-markets-in-focus.html

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Data from Feedsoft AI (https://feedsoft.ai/). For information only; not investment advice.