New yuan trading hours: What you need to know

Meanwhile, the United States raised its interest rates in December and more hikes are expected in 2016.

China’s central bank guided yuan lower again this morning, to 6.5169 versus Monday’s 6.5032, a new low since April, 2011. The monetary authority has reduced the reference rate by 0.49 per cent in the past five sessions. “The currency will drop further in the first quarter as China makes the exchange rate more market-driven”.

China’s onshore yuan firmed against the dollar on Tuesday after suspected intervention by the central bank, a day after a slide in the country’s forex and stock markets sparked a panicky global sell-off. “They don’t want to have any abrupt movements in the currency that could be destabilized”, Charles Collyns, managing director and chief economist at the Institute of International Finance (IIF), told Xinhua in a recent interview.

The People’s Bank of China (PBOC), the central bank, said Monday that it injected 100 billion yuan (15.4 billion US dollars) into the market in December through medium-term lending facility (MLF).

The figure, shows Yuan’s bull run against Dollar, which was in effect since 2005 basically began its end in 2014 but spread between the two counterparts were relatively smaller, which started changing from October, 2014 but basically in August a year ago spread really got out of hand.

China Foreign Exchange Trade System also introduced a new index to gauge the renminbi’s value against a basket of 13 currencies.

In explaining the reason for the index, the PBOC said it “will help guide market participants to shift their focus from the bilateral RMB/USD exchange rate to the effective exchange rate, which is based on a basket of currencies”.

Going forward, one key area to watch is China’s yuan, which is pegged to the US dollar.