(Bloomberg) -- China’s onshore yuan approached the weaker end of its trading band and the offshore unit fell past the key 7.3 per dollar level following the party congress and the threat of further outflows due to hawkish Federal Reserve bets. 

The Chinese currency fell as much as 0.6% in onshore markets to 7.2648 per dollar, which is 1.99% weaker than the People’s Bank of China’s official fixing, the nearest it’s been to the weak-end of the 2% trading band since 2015. The offshore yuan sank as much as 1.5% to 7.3322 per dollar, an all-time low since the unit started trading in 2010.

The currency accelerated the selloff amid the absence of a shift in Covid policies at the party summit even as the measures have weighed down on the economy. The yuan is also under pressure to fall as aggressive Fed hike bets threaten to widen the US-China yield gap and drive outflows. Moreover, the PBOC ended its streak of steady yuan fixings on Monday, which was seen as a sign its toning down support for the currency after the Communist Party congress ended on Sunday. 

Around 90% of the 30 yuan traders who responded to a Bloomberg survey last week had forecast the PBOC to ease its tight-ranged fixing after the party congress. Half of the survey respondents also said they expected the yuan to be pushed to 7.4 or even 7.5 per dollar within the year, and only 10% saw it staying at around 7.25.

--With assistance from Ye Xie.

(Updates with onshore currency move.)

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