The US dollar is getting crushed in Asia

The US dollar can’t take a trick at present. Courtesy of a sharply stronger Chinese yuan, the greenback is yet again on the ropes in Asia.

The People’s Bank of China “fixed” Friday’s USD/CNY rate at 6.4628, well below Thursday’s fixing level of 6.4961. The 333 pip decline was the strongest one-day strengthening in yuan’s starting level since November 2015.

Not only that, as this tweet from IG Markets chief market strategist Chris Weston notes, the 0.5% strengthening was the third largest daily percentage increase on record.

The PBOC’s adoption of measuring the yuan against a basket of currencies, something that takes into consideration movements in other currencies such as the euro and the yen, has seen the fixing level move lower in recent days on the back of renewed US dollar weakness following a raft of economic and interest rate downgrades from the US Federal Reserve earlier this week.

The USD/CNY is now trading at the strongest level against the US dollar since December 7 last year. Other currencies such as the Australian dollar, euro and yen have all strengthened on the back of the CNY move.

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