(Bloomberg) -- Chinese banks were seen selling dollars after the yuan weakened past a key level, stoking speculation that authorities were seeking to slow the losses.
The yuan was 0.5 percent lower at 6.6981 per dollar at 11:31 a.m. in Shanghai after earlier falling to 6.7204. Some Chinese major banks sold the dollar in the swaps market, according to four traders. A Bloomberg survey last week found observers expected the People's Bank of China would act to slow the descent at 6.7.
China's currency has retreated more than 4 percent against the greenback since June 14, the most among 31 major currencies tracked by Bloomberg. A failure to contain the tumble will feed speculation officials are effectively depreciating the yuan to defend against the effects of trade tariffs.
The offshore exchange rate also trimmed losses but was still 0.5 percent lower at 6.7198, extending its worst day since January 2017.
--With assistance from Ran Li.
To contact the reporter on this story: Richard Frost in Hong Kong at rfrost4@bloomberg.net
To contact the editor responsible for this story: Sarah McDonald at smcdonald23@bloomberg.net
©2018 Bloomberg L.P.
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