Yuan knocks dollar really hard

Some of the biggest gains on record for China's yuan sent currency markets spinning on Thursday, driving the dollar broadly lower and threatening to quash one of the central bets of global investors for 2017.

A year after a tussle between Beijing and hedge funds betting against the currency, many major asset managers and banks have called for the yuan to fall in 2017. Dealers said the moves had the potential to squeeze many players out of those positions just five days into January.

By midday in Europe, the yuan was just under half a percent higher on the day against the dollar at 6.8364 , having gained almost 3 percent from lows hit on Tuesday.

The dollar's index against a basket of six major currencies (DXY) slipped to as low as 101.86, a three-week low, just two days after it had hit a 14-year high of 103.82 on Tuesday, when a strong reading from a U.S. manufacturing survey boosted the greenback. It was a third of a percent lower on the day at 102.33 by 1220 GMT (7:20 a.m. ET).

The euro rose as much as 0.7 percent in Asia to $1.0563 before trimming those gains to 0.2 percent. The dollar still 0.6 percent weaker at 116.61 yen.

More at ag-markets.com/news