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Trade war

Weak yuan risks becoming double-edged sword for China

Capital flight would erase any gains from using currency as trade bargaining chip

The People's Bank of China has been lowering its daily reference rate for the yuan, which weakened to a low of 6.72 to the dollar on Tuesday.

SHANGHAI -- The yuan touched an 11-month low on Tuesday as China braces for U.S. tariffs, fueling speculation that Beijing is using the currency to gain an edge in trade talks even at the risk of encouraging capital flight.

The Chinese currency weakened to 6.72 yuan to the dollar before bouncing back. The U.S. is set to slap 25% tariffs on $34 billion worth of Chinese imports on Friday, with Beijing poised to impose retaliatory levies on the same scale.

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