China’s yuan extends 7-month lows

SHANGHAI: China’s yuan weakened to a seven-month low against the dollar on Monday and was closing in on the official policy band limit, pressured by broad strength in the dollar and the drop in the yen. The currency seemed set for a sixth straight monthly drop in June, and has stayed within a whisker of the weak side of its daily official trading band over the past week as capital outflows into higher yielding dollars and speculation the central bank is allowing it to depreciate slowly have weighed on it.

Spot yuan eased to a trough of 7.2624 per dollar, the weakest level since November and just one pip away from the weak end of the band in which the People’s Bank of China guides it. It last traded at 7.2618 per dollar as of 0910 GMT. It had, however, stayed within a very narrow range as traders waited for key economic data at home and other US indicators that will help shape the USFederal Reserve’s policy expectations.