Chinese Yuan Hits Over 2-Year Low on Economic Woes, Fed Jitters

By Ambar Warrick China’s yuan sank to a new two-year low on Wednesday as anticipation of an upcoming Federal Reserve rate hike boosted the dollar, while concerns over slowing economic growth in the country also weighed. 

The yuan fell 0.3% to 7.0394 to the dollar, its weakest level since July 2020. It also marked a third consecutive session spent below the psychologically important 7 level. 

The biggest source of pressure on the yuan was strength in the U.S. dollar. The dollar index jumped 0.6% on Tuesday and was pinned near 20-year highs in anticipation of an at least 75 basis point hike by the Fed later today.

The yuan now faces a growing rift between local and U.S. interest rates, which has been a key reason behind the currency’s losses this year. The People’s Bank of China maintained some of its key interest rates on Tuesday, after cutting them several times this year to boost growth.

The Chinese government has to maintain a balancing act in unlocking more stimulus to help economic growth while ensuring that the yuan does not depreciate any further. The currency has fallen despite a series of bullish midpoint fixes by the central bank, and is among the worst-performing Asian units this year. 

Economic growth in China has slowed substantially this year, largely in part due to Beijing’s zero-COVID policy. Lockdowns in major economic hubs such as Shenzhen and Chengdu ground business activity to a halt, and also severely undermined investor confidence in the country. 

On Wednesday, the European Chamber of Commerce, a major industry group, warned that China’s attractiveness as an investment hub was being eroded by its reluctance to budge on the zero-COVID policy. 

The policy has resulted in sporadic lockdowns this year, and kept China’s borders largely shut to international travel. Beijing backed its stance by stating the need to prevent its health system from being overwhelmed, as well as preventing loss of life.

Begin trading today! Create an account by completing our form

Privacy Notice

At One Financial Markets we are committed to safeguarding your privacy.

Please see our Privacy Policy for details about what information is collected from you and why it is collected. We do not sell your information or use it other than as described in the Policy.

Please note that it is in our legitimate business interest to send you certain marketing emails from time to time. However, if you would prefer not to receive these you can opt-out by ticking the box below.

Alternatively, you can use the unsubscribe link at the bottom of the Demo account confirmation email or any subsequent emails we send.

By completing the form and downloading the platform you agree with the use of your personal information as detailed in the Policy.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 82.4% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Back to top

Office network
  • London Office
    One Financial Markets 

    1 Finsbury Market
    EC2A 2BN
    United Kingdom

    T:  + 44 ( 0 ) 203 857 2000
  • Dubai Office
    One Financial Markets 
    OT19-39 Central Park Tower
    Dubai International Finance Centre
    United Arab Emirates
    T: + 00 971 44 22 888

One Financial Markets is the trading name of Axi Financial Services (UK) Ltd, a company registered in England with company number 6050593. Axi Financial Services Ltd is authorised and regulated by the Financial Conduct Authority in the UK (under firm reference number 466201) and the Financial Sector Conduct Authority in South Africa (with FSP number 45784).

The information on this site is not directed at residents of the United States, Belgium, Poland or any particular country outside the UK and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation. is owned and operated by Axi Financial Services (UK) Ltd.

Award winning broker
We have been presented with a number of awards that recognise the quality of our service and dedication to our clients :

Best FSA Regulated Broker
Saudi Money Expo

Best Education Product
Saudi Money Expo

Best Broker - Online Trading
IAIR Awards

Best Institutional Broker
Saudi Money Expo

Best FX Services Broker
CN Forex

Top International
FX Broker 2015

Saudi Money Expo

Broker of the Year
Online Trading – Middle East

IAIR Awards

Best Forex
Customer Service 2018

JFEX Awards

We accept the following payment methods: