Several Asian currencies hit multi-year lows late last week, as the yuan weakened past the important 7-per-dollar level, while bets of a big U.S. Federal Reserve rate hike next week boosted Treasury yields and kept dollar demand intact.
Thailand’s baht slid to a level not seen since December 2006, while the Taiwanese dollar slipped to its lowest since September 2019. South Korea’s won hit a fresh 13-1/2-year low.
The yuan had fallen below 7 per dollar only twice since the global financial crisis of 2008, and its crossing of the level could now stoke fears of capital outflows. The won, the worst performing emerging-market currency in Asia so far this year, fell 0.2% and was on course for a sixth straight weekly decline against the dollar.