Chinese yuan weakens to 6.7134 against US dollar

The central parity rate of the Chinese currency renminbi, or the yuan, weakened 235 pips to 6.7134 against the U.S. dollar Tuesday, according to the China Foreign Exchange Trade System.

In China's spot foreign exchange market, the yuan is allowed to rise or fall by 2 percent from the central parity rate each trading day.

The central parity rate of the yuan against the U.S. dollar is based on a weighted average of prices offered by market makers before the opening of the interbank market each business day.

Asian equities tumbled Friday following a rout on Wall Street fuelled by worries over rising interest rates and surging inflation, while the pound extended losses the day after taking a beating on fears of a UK recession.

Global markets have been battered this year by a series of crises including surging inflation, rising interest rates, China's economic slowdown and the war in Ukraine.

There was some relief after the Federal Reserve on Wednesday lifted borrowing costs 50 basis points-the most since 2000 -- but suggested a feared 75-point lift was not on the agenda for now.

However, US traders ran for the hills Thursday as they contemplated a period of fierce monetary tightening by the US central bank as it struggles to contain inflation running at a more than 40-year high.

The Nasdaq-dominated by tech firms particularly sensitive to higher rates-lost five percent, while the Dow and S&P 500 fell more than three percent.

"Valuations become even more sensitive, very sensitive, when rates are going up and that is what we are experiencing," Kristina Hooper, at Invesco, told Bloomberg Television.

"It's just getting exacerbated as we get into the thick of monetary-policy tightening in the US."

That sell-off filtered through to Asia, where Hong Kong tanked more than three percent as tech firms took a hit. Meanwhile, the European Chamber of Commerce in the city called the finance hub's stringent pandemic travel restrictions and frequent flight bans a "nightmare" for businesses.

The remarks come a week after the Australian Chamber of Commerce recommended that Hong Kong follow the lead of Singapore or Japan by lowering quarantine requirements for business travellers.

Shanghai, Sydney, Seoul, Singapore, Wellington, Taipei and Manila also tanked. However, Tokyo ended the morning slightly higher.

Adding to the selling pressure was ongoing weakness in China's economy caused by strict lockdowns and other containment measures as officials struggle to bring a Covid flare-up under control by sticking to a zero-Covid policy.

Various districts in Beijing told residents on Thursday to work from home, while Shanghai, the biggest city in the country, remains essentially shut down.

On currency markets the pound continued to struggle a day after plunging more than two percent in reaction to the Bank of England's updated forecast that warned annual inflation would top 10 percent and the economy would contract later this year.

Crude rose after key oil producers led by Saudi Arabia and Russia refused to lift output more than their planned marginal increase as they weighed tight supply concerns caused by the Ukraine war.

"OPEC's inability to ramp up production when desperately needed by the market is compounding an already dangerous supply deficit," said Stephen Innes, of SPI Asset Management. "This means