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Yuan falls most in two months as trading resumes after holidays
[SHANGHAI] The yuan headed for its biggest loss in two months as the currency traded for the first time since Wednesday.
The yuan lost 0.4 per cent at 9:51 am in Shanghai to approach a five-year low against the dollar. A gauge of the greenback's strength climbed 1.1 per cent when mainland markets were closed for holidays. The central bank set the reference rate 0.3 per cent weaker.
Losses in the yuan have accelerated in recent weeks as the dollar strengthened and China's economic outlook deteriorated. Data Monday is expected to show industrial output rose 6 per cent in May from a year earlier, while retail sales climbed 10.1 per cent - both unchanged from April's figures.
"There is a high chance the yuan will break the January low," said Wang Ju, senior foreign-exchange strategist at HSBC Holdings Plc.
"The fundamentals for the yuan are weak: the economy is slowing and capital is flowing out of China."
The onshore yuan was little changed in Hong Kong, after falling 0.6 per cent over Thursday and Friday.