China on Alert With Yuan at the Mercy of Overseas Traders

An employee uses a machine to count Chinese 100 yuan banknotes at the Hang Seng Bank Ltd. headquarters in Hong Kong on April 16, 2019. Photo: Bloomberg

(Bloomberg) — The onshore yuan is on track for a seventh month of losses, and things could get even worse for its less-regulated offshore exchange rate as China goes on a one-week holiday.

The currency traded in Shanghai is matching a record run of monthly losses set during the height of the U.S.-China trade war four years ago. Its realized volatility this week spiked to a level unseen since 2020 as the exchange rate was buffeted by the dollar’s surge and Beijing’s steps to resist yuan weakness.