China's Yuan Suddenly Retreats the Most in Three Weeks

(Bloomberg) -- China’s yuan suddenly dropped on Monday to end a long spell of subdued trading.

The offshore yuan fell 0.21% to 6.8952 a dollar as of 4:47 p.m. in Hong Kong. The yuan traded onshore was down 0.18% as the worst performer among Asian currencies tracked by Bloomberg.

Yuan liquidity in Hong Kong was loose, making it cheap to short the currency. The overnight Hibor has tumbled 134 basis points in the past five sessions, the longest slump since December.

Tiny moves in the yuan turned it into the world’s dullest currency lately. Investors had been waiting to see what will happen next in the U.S.-China trade dispute. Chinese and American negotiators are set to meet again this week in Shanghai. They’re also watching to see how the People’s Bank of China will respond if the Federal Reserve cuts interest rates later this week, as expected.

©2019 Bloomberg L.P.