Chinese yuan weakens beyond 6.9 against USD

BEIJING - China's yuan further weakened on Thursday to pass the threshold of 6.9 against the US dollar.

The central parity rate of the yuan weakened 181 basis points to 6.9085 against the US dollar Thursday, according to the China Foreign Exchange Trading System.

This is the first time since June 2008 that the Chinese currency has fallen beyond 6.9 against the US dollar.

Analysts attribute the decline to a firming US dollar amid rising expectations over a US interest rate hike and upbeat economic data released overnight.

A number of Federal Reserve policymakers said a rate hike could be appropriate "relatively soon" if the economic data permits, according to minutes from the Federal Reserve's November meeting released Wednesday.

Meanwhile, US Commerce Department data showed that US new orders for manufactured durable goods in October increased by a better-than-expected 4.8 percent to $239.4 billion, indicating strong economic prospects for the country in the fourth quarter.

The dollar index, which tracks the greenback against six major peers, was up 0.6 percent to 101.65 in late trading Wednesday.

Yu Yongding, economist and former central bank advisor, said the yuan faces short-term depreciation pressure, but China's economic fundamentals do not support its long-term depreciation.

In China's spot foreign exchange market, the yuan is allowed to rise or fall by 2 percent from the central parity rate each trading day.

The central parity rate of the yuan against the US dollar is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day.