The Chinese yuan (RMB) has been slumping for the past eight days and the People's Bank of China set the Renminbi midpoint fixing against dollar at 6.6166 this Friday.

The strong performance of the US dollar index has also been forcing the yuan down in comparison. Apart from obvious reason-trade tensions between the China and US, other factors driving the Renminbi's depreciation have been the weak demand for the Chinese currency. 

“I think in the trading market, the major currency is still USD. The demand on RMB is not very large. This is the biggest for the short-term depreciation of RMB. I think in the future, the demand of our RMB will depend on the bond market. The debt default is becoming larger than before. This is another reason our RMB is very short very little in these few months,” said Deng Zhijian, the investment strategist of DBS China.