Chinese Yuan Weakens Beyond 6.9 against US Dollar

China's yuan further weakened on Thursday to pass the threshold of 6.9 against the US dollar.

    The central parity rate of the yuan weakened 181 basis points to 6.9085 against the US dollar Thursday, (Xinhua) reported citing the China Foreign Exchange Trading System. This is the first time since June 2008 that the Chinese currency has fallen beyond 6.9 against the US dollar. 

    Analysts attribute the decline to a firming US dollar amid rising expectations over a US interest rate hike and upbeat economic data released overnight. A number of Federal Reserve policymakers said a rate hike could be appropriate "relatively soon" if the economic data permits, according to minutes from the Federal Reserve's November meeting released Wednesday. 

    In China's spot foreign exchange market, the yuan is allowed to rise or fall by 2% from the central parity rate each trading day. The central parity rate of the yuan against the US dollar is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day.