USD/CNY: Yuan headed for 4th weekly loss on signs PBOC allowing weakness

The Chinese yuan weakened this week against its American counterpart and is headed for its fourth weekly decline on speculation that the Chinese authorities will devalue the exchange further as Britain’s exit from EU’s membership clouds the outlook for the world’s second-largest economy.

Adding to the China slowdown concerns, the country’s manufacturing sector activity contracted further in June and hit the lowest levels in four months, Caixin reported. The Caixin Manufacturing PMI print came in at 48.6, way below the market forecast for 49.2.

The Chinese currency fell 0.05% to 6.6510 versus the US dollar, taking this week’s loss to 0.4%. A Bloomberg replica of a 13-currency index tracked by the People’s Bank of China (PBOC), which is based on spot movements, also dropped below 95 for the first time since October 2014.