Yuan dips from 3-week high as tariffs weigh on sentiment

Yuan slips: China's Yuan softened on Tuesday after a five-week urd trend against Dollar began to falter, with trers anticipating currency may stabilise within a new range until re are signs of ecomic improvement.

By late Tuesday morning in Asia, Yuan was tring at 7.1277 per Dollar, down from Monday's three-week peak of 7.1135. Offshore, Yuan stood at 7.1271.

July's industrial profit growth showed a slight acceleration according to official data released on Tuesday, but earlier figures from August h indicated a slowdown in exports.

Cana's tariffs hit exports

ding to pressure, Cana anunced a 100 per cent tariff on Chinese electric vehicles and a 25 per cent tariff on steel and aluminium, furr dampening market sentiment, particularly as exports remain a crucial support for China's slowing ecomy.

Despite se hewinds, yuan has gained 1.3% against dollar this month, largely due to dollar's broer decline in anticipation of US interest rate cuts.

Analysts at UOB said that it would be significant if Dollar fell below offshore Yuan support levels of 7.0835 and 7.0636. In near term, y expect yuan to tre within a range of 7.1150 to 7.1350.

As Dollar weakened across board, currencies of several of China's tring partners rallied, leing to a decrease in yuan's tre-weighted value.

official tre-weighted index lost its gains for year and stood at 97.89 as of its last update on Friday. Against Euro, Yuan was tring at 7.9558, near lower end of a range it has maintained for a year.

"A declining tre-weighted CNY aligns with PBOC's easing monetary policy," said Alvin Tan, a strategist at RBC Capital Markets.

PBOC sets weaker midpoint

Ahe of market opening, People's Bank of China set midpoint rate, which allows Yuan to tre within a 2 per cent band, at 7.1249 per Dollar, slightly weaker than Reuters' estimate.

Yields on Chinese government 10-year bonds rose 0.2 basis points to 2.17 per cent. yield on equivalent US government debt was 3.8 per cent. Dollar's index against six major currencies stood at 100.88, down 3 per cent in August.