From Bloomberg (link)
The yuan’s decline today may signal China’s intention to thwart speculators betting on a gain before President Hu Jintao visits Washington, said ABN Amro Holding NV.
A repetition of yesterday’s gains, which took the yuan to within 0.03 percent of 8 against the dollar, would have breached that level. The central bank, which last year ended a decade-old peg to the dollar and revalued the yuan at 8.11, today announced a daily yuan reference rate below yesterday’s close. Traders today also reduced bets that China will let the yuan strengthen.
“There’s lots of speculators betting that we’re going to break the 8 yuan per dollar level soon,” said Shahab Jalinoos, head of Asian currency strategy at ABN Amro in Singapore. “The authorities are very averse to speculators trying to make money, so they’re making it hard for them.”