The impact of the ongoing row about China’s position in the world economic order was laid bare on Thursday and into Friday after it saw its worst monthly drop in over 20 years.
Figures reveal that the currency, which has taken a battering since US President Donald Trump imposed a sanctions regime on the major Asian economy, has plummeted by 3.7% over the course of the month in its pair with the US dollar.
This represents the worst level of decline it has seen since 1994 – which was 25 years ago.
There is still no clear sign of resolution to the trading relationship problems between the two countries.
Mixed messages have been coming out of the US this week: some officials said earlier in the week that more negotiations may be possible, but China claimed that its government had not received any such overtures from the US.
The next development will be on Sunday, when tariffs imposed by the US are expected to kick in.
It is understood that the 15% tariffs on $125bn worth of Chinese items will be implemented as planned.
Elsewhere in Asia, the Japanese yen – a so-called safe haven currency which saw a rise earlier this week followed by a drop as the dollar regained power – barely moved.
It was fixed at 106 in its pair with the US dollar. Overall, though, it is celebrating a positive August – and has seen a rise of about 2% over the course of the month.
Analysts expect that this is a phenomenon that will continue to rear its head.
Japan’s yen tends to do well when investors are worried, and hence any developments on issues like Brexit may enhance its position.
Speaking of Brexit, the week ended relatively calmly in the UK compared to last week.
The pound was spotted at $1.2182 in its pair with the US dollar at one stage.
This represented stability for the currency, which over the last few days has seen some downs due to the decision of the government to suspend parliament for an additional week or so – leading to less time to discuss Brexit.
It is believed that next week could hold some clues as to the future direction of the Brexit saga.
Parliamentarians will be meeting again, and there is some speculation that opposition MPs could join forces to bring about a motion of no-confidence in Prime Minister Boris Johnson.
The Australian dollar is also suffering at the moment, and like the yuan it at least came close to setting some records in recent days.
It declined by a fifth of a percentage point over the course of Thursday and into Friday in its pair with the greenback.
It was spotted at $0.6718 at one stage, which represented close to its worst performance in 10 years.
For the Kiwi dollar, a drop of 0.2% was also noted against the US dollar.
It reached $0.6297, and at one stage it dipped even lower and found itself at its worst position for almost five years.