Caterpillar's stock drops after yuan weakens versus dollar

By Dennis FitzgerldStocksFOXBusiness

Shares of Caterpillar (NYSE:CAT) sank on Thursday after China’s currency weakened the most since a devaluation in August 2015.

The company's stock was down $2.74, or 1.78%, to $151.60.

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The currency's slide gathered momentum midmorning Asian time following the publication of data showing that China’s trade surplus had narrowed last month more than expected because of imports growing faster than exports, Dow Jones reported.

Even after the yuan’s drop Thursday, it was still up more than 8% against the dollar in the past year amid a broad-based decline in the greenback.

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If Thursday’s weakening in the yuan is sustained, the price of the construction equipment that Caterpillar sells in China may become more expensive.

The company said last month in its quarterly earnings report that it expected China to be an area of strength in the first half of 2018, with a “gradual tightening” in the second half.

This story has been updated.

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