LONDON: China's yuan fell to its lowest level against the U.S. dollar since mid-August on Monday, as investors become increasingly worries a growing trade conflict between Beijing and Washington will squeeze the Chinese economy.

The yuan, traded in offshore markets, fell 0.9 percent on the day, its biggest one-day drop since January 2017, to 6.6925 yuan per dollar.

The Chinese currency suffered its worst ever month against the dollar in June, and is now down almost 5 percent since the middle of last month.

Chinese stocks have also taken a battering, with the Shanghai bourse hitting over two-year lows in an ominous start to July, days before U.S. tariffs on Chinese exports are due to take effect.

The dollar is also rallying broadly and is up 0.5 percent on the day against a basket of currencies.