USD/CNY: Yuan kicks-off 2017 on the back foot

The Chinese currency set-off the New Year on a weaker footing versus its American dollar, in response to a generalized strength in the greenback, as the US currency brought an end to its profit-taking slide last week.

However, a sharp devaluation in the Yuan by the Chinese central bank today, emerged the key catalyst behind the jump in USD/CNY. The PBOC set the first USD/CNY reference rate for 2017 at the weakest level in two weeks, 128 basis points weaker at 6.9498 versus 0.9370 previous.

Meanwhile, the USD/CNY pair wipes-out most gains and trades modestly flat at 6.9450 in late-Asia, reversing a spike to 6.9567.