"State Banks Intervene as China's Yuan Hits Four-Month Low, Global Stocks Dip"

China's yuan fell to a four-month low against the dollar, prompting state-owned banks to intervene and defend the currency. Market sources revealed that state banks bought yuan for dollars, and the currency closed at 7.2275 per dollar, 281 pips softer than the previous session. The yuan's decline is attributed to growing expectations of further monetary easing to support the economy, as well as a stronger dollar and depreciation of the Japanese yen and other Asian currencies. The People's Bank of China set the midpoint rate weaker than market projections, indicating potential further easing measures. The sudden weakness in the yuan also impacted stock markets, with the Shanghai stock index down 1%.