China Lowers Yuan Midpoint to 19-Month Low Amid Trade War

China has lowered its yuan midpoint for the sixth consecutive day, setting it at 7.2092 per dollar, marking a 19-month low, as the People's Bank of China (PBOC) attempts to stabilize the currency amid escalating U.S.-China trade tensions. The PBOC's recent adjustments reflect its strategy to maintain financial market stability while facing challenges to China's export competitiveness. Analysts speculate that further devaluation could be on the horizon if trade relations worsen, although significant depreciation is viewed as risky for the Chinese economy. The offshore yuan has also seen declines, hitting a record low of 7.4290 against the dollar, which some economists warn could trigger a global crisis of confidence in China's economy. Despite these pressures, the PBOC is reportedly cautious about allowing further significant weakening to avoid aggravating relations with the U.S. and destabilizing financial markets. As part of its response, the Chinese government is also looking to support its stock markets amidst these economic challenges.