The yuan has been closely watched by investors, economists and other market watchers in recent months because it is seen as one of the tools China can use in response to rising U.S. tariffs. Last month, the currency weakened past a psychologically important level of 7 against the greenback. A weaker yuan, which is also known as the renminbi, would make China’s exports relatively cheaper on the international markets. The U.S. has repeatedly accused Beijing of keeping its currency weaker in order to gain a trade advantage over its competitors.
Since last year, the world’s two largest economies have imposed levies on billions of dollars worth of each other’s goods, which has affected international markets and dampened global growth outlook. Additional American tariffs are set to take effect on October 1 and December 15. There’s no clear consensus among analysts on where the yuan might be headed, but many have said it depends on how the trade war escalates, or de-escalates.