THE yuan inched lower against the U.S. dollar yesterday, extending losses from last week as the U.S. currency enjoyed broad support from a solid U.S. economy that kept intact Federal Reserve plans to continue raising interest rates.

The yuan is also grappling with persistent depreciation pressure, leaving it vulnerable to negative news flow as China’s economy cools in the face of slackening domestic demand and trade frictions with the United States.

The Fed last week struck a largely upbeat note on the U.S. economy after holding rates steady, staying on course to raise interest rates further in December and through 2019.

Prior to market opening yesterday, the People’s Bank of China lowered the midpoint rate for the third straight day to 6.9476 per dollar, 147 pips or 0.2 percent weaker than the previous fix of 6.9329.

Yesterday’s fixing was the weakest since Nov. 1.

In the spot market, the onshore yuan opened at 6.9500 per dollar, and then fell to a low of 6.9608 before pulling back up a little to 6.9590 at midday, 30 pips weaker than the previous late session close and 0.16 percent softer than the midpoint.

The yuan declined 1 percent last week for its biggest weekly loss in nearly four months.

Activity was subdued in yesterday’s morning trade as traders were reluctant to make any big bets ahead of a slew of economic data this week, including retail sales, industrial output and investment. (SD-Agencies)