# China Lets Its Currency Weaken Past a Key Barrier and Tries to Manage the Fall

> China's central bank set the yuan's daily reference rate weaker than 7 per dollar, breaking a psychological barrier that had held since 2020. The fixing signals the authorities are allowing currency weakness while trying to manage the pace of decline.

- Date: 2022-09-26 · published 2022-09-26T12:00:00.000Z
- Category: macro · region China · magnitude medium
- Page: https://feedsoft.ai/events/7211-china-lets-its-currency-weaken-past-a-key-barrier-and-tries-to-manage-the-fall
- Commodities: [Chinese Yuan (CNY per USD)](https://feedsoft.ai/c/USDCNY.md), [Soybeans](https://feedsoft.ai/c/SOY.md)

## Why it matters

A weaker yuan raises the cost of dollar-priced imports for China, which can reduce purchasing of US soybeans and feed ingredients and pressure related prices.

## Read by commodity

- SOY: bearish ▼
- USDCNY: bullish ▲

## Linked price moves

| Commodity | Date | Window | Change % | z-score | Why linked |
| --- | --- | --- | --- | --- | --- |
| USDCNY | 2022-09-27 | 5 | +2.3% | 3.8 | The PBOC fixing weaker than 7 per dollar on 9/26 broke a key barrier and signaled tolerance of depreciation, adding to the USD/CNY rise. |

## Similar past events

| Commodity | Date | Event | 5-day % | 20-day % |
| --- | --- | --- | --- | --- |
| USDCNY | 2018-01-09 | [China Changes the Way It Manages Yuan After Currency's Jump - Bloomberg](https://feedsoft.ai/events/67197-china-changes-the-way-it-manages-yuan-after-currency-s-jump-bloomberg.md) | -0.9% | -3.3% |
| USDCNY | 2019-04-30 | [China is letting its currency decline in a 'snub' to Trump, ING says](https://feedsoft.ai/events/59802-china-is-letting-its-currency-decline-in-a-snub-to-trump-ing-says.md) | +0.4% | +2.6% |
| USDCNY | 2021-07-28 | [Asian currencies: Chinese yuan, Hong Kong dollar weaken as China stocks fall](https://feedsoft.ai/events/46285-asian-currencies-chinese-yuan-hong-kong-dollar-weaken-as-china-stocks-fall.md) | -0.6% | -0.6% |
| USDCNY | 2016-12-29 | [What Is China Trying to Do With Its Currency?    - WSJ](https://feedsoft.ai/events/73691-what-is-china-trying-to-do-with-its-currency-wsj.md) | -1.0% | -1.1% |
| USDCNY | 2023-03-08 | [China's yuan weakens to 2-month low, with key 7-per-dollar level in sight  - The Business Times](https://feedsoft.ai/events/37091-china-s-yuan-weakens-to-2-month-low-with-key-7-per-dollar-level-in-sight-the.md) | -1.3% | -1.2% |
| SOY | 2019-06-11 | [Why ‘cracking seven’ is a big deal for China’s currency](https://feedsoft.ai/events/58820-why-cracking-seven-is-a-big-deal-for-china-s-currency.md) | +6.3% | +2.8% |
| SOY | 2024-12-03 | [China’s yuan hits lowest level in months as Trump tariff threats roil currencies \| South China Morning Post](https://feedsoft.ai/events/27171-china-s-yuan-hits-lowest-level-in-months-as-trump-tariff-threats-roil.md) | +0.5% | +1.3% |
| SOY | 2024-07-22 | [China cuts lending rates to boost economic growth following weaker Q2 GDP data](https://feedsoft.ai/events/7518-china-cuts-lending-rates-to-boost-economic-growth-following-weaker-q2-gdp-data.md) | -1.8% | -14.4% |

## Sources

- nytimes.com: https://www.nytimes.com/2022/09/26/business/china-renminbi-currency.html

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