China’s offshore yuan has strengthened against the dollar, according to Reuters

© Reuters Photo File: A Chinese yuan note is seen in this May 31, 2017 file photo. REUTERS/Thomas White/Illustration/

SHANGHAI (Reuters) – The dollar fell in early deals on Wednesday, with offshore trading falling to a record low on expectations of more Federal Reserve rate hikes.

China fell as low as 7.2349, this data in 2016.

Its onshore counterpart followed suit, falling to $7.2302 in early trade, the weakest since the 2008 global financial crisis.

“Non-dollar currencies fell in the first trade, the yuan cannot escape,” said a foreign bank trader.

Several currency dealers also said corporate dollar purchases were too strong, putting further pressure on the yuan.

Ahead of the market open, the People’s Bank of China (PBOC) set the midpoint rate at $7.1107, 385 pips or 0.54% weaker.

The currency cuts come even as China’s central bank announced new measures on Monday to slow the yuan’s decline, making bets against the currency more expensive.

Earlier this month, the PBOC cut the amount of foreign currency reserves that financial institutions must hold, aiming to slow the yuan’s devaluation.

A second trader at a Chinese bank said efforts by authorities to stem the yuan’s weakness have been limited.

A source told Reuters late on Tuesday that China’s monetary authorities are asking local banks to revive a yuan-fixing tool they abandoned two years ago as they seek to manage and protect the rapidly weakening currency.

The dollar’s strength comes after the U.S. central bank last week raised interest rates by three-quarters of a percentage point for the third consecutive time and signaled that borrowing costs will continue to rise this year.

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