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CNY and HKD Sell off as Regulatory Fears Spread

Investors are dumping the Chinese yuan and Hong Kong dollar as the selloff in China stocks continues, and those currencies slid on Tuesday to lows not seen since April. Regulatory fears are spreading to other parts of the Chinese market, after Beijing stepped up restrictions on its education sector late last week, and continued its crackdown on its internet companies.

The offshore yuan — which trades outside mainland China — weakened by nearly 1% compared to last Friday, dropping to as low as 6.528 yuan against the dollar overnight. By Wednesday morning, it had pared those losses slightly to trade at 6.5142 yuan against the dollar.

Chinese A shares — which trade in mainland China and are included in global indexes like the MSCI — are traded in the yuan. The Hong Kong dollar also tumbled to lows not seen since April, after a two-day rout in the city’s Hang Seng index this week. It declined to as low as 7.7849 against the greenback overnight.

Source: FXPro

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