Yuan in biggest yearly loss

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SHANGHAI: China's yuan weakened against the dollar on Thursday, finishing the year with a record yearly loss of 4.7 percent after volatile trading in last five months.

A big question in global currency trade for 2016 is how much further the yuan might depreciate.

Still, the Chinese currency has posted comparatively smaller losses against the dollar than other global currencies.

"We believe yuan depreciation is likely to continue through 2016," said Craig Chan, FX strategist at Nomura.

Some traders forecast that it could slip as far as 6.80 to the dollar at the end of 2016, based on the slowing growth of the world´s second-largest economy and divergence in the value of the yuan onshore and offshore.

"We think China and the United States will continue their (different) tone in monetary policy in 2016, which would boost the dollar and exert downward pressure on the yuan," said a dealer at an Asian bank in Shanghai.

Prior to Thursday´s market opening, the People´s Bank of China (PBOC) set the midpoint rate at 6.4936 per dollar, its weakest level since May 2011 and 0.1 percent weaker than the previous fix of 6.4895. The spot market closed at 6.4936 per dollar, 0.05 percent weaker than the previous close.