China's State Banks Act to Contain Yuan's Slide

Amid a resurgent US dollar and expectations of an interest rate cut, the yuan has fallen to a three-week low.

China's major state-owned banks have been active in onshore and offshore foreign exchange markets in an attempt to contain the yuan's slide.
The banks have been swapping yuan for US dollars in the onshore swap market and then quickly selling those dollars in the spot market to support the yuan.
The banks have also been curtailing their lending in offshore yuan markets to keep liquidity tight, which could raise the cost of shorting the Chinese currency.
The yuan is facing renewed downside pressure against a globally resurgent US dollar and has fallen to a three-week low against the dollar.
Increasing market expectations of an interest rate cut in China are also weighing down the local currency.