Yuan weakens due to increased differences in yields and large capital leaving the country.

The value of China’s currency, the yuan, experienced a significant decline against the US dollar on Monday. It came close to reaching its daily trading limit, indicating mounting pressure caused by several factors. One of these factors is the widening yield gap between China and the United States, which affects the attractiveness of the yuan to investors. Additionally, the country is facing significant capital outflows, meaning that money is leaving China at a rapid pace. Another concern contributing to the currency’s fall is the escalating conflict in the Middle East, which is causing unease among investors and further impacting the yuan’s value.

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