The yuan was under pressure against the dollar on Thursday, giving up some initial gains as markets digested a Reuters report that China is considering allowing a weaker yuan to weather the tariff risks.

China’s yuan slid the most in a week following a report that Beijing is considering allowing the currency to weaken next year in response to the threat of a trade war with the US.

The move triggered drops in regional peers, with the New Zealand dollar falling to the weakest in more than two years, while the Australian dollar hit levels last seen in November last year.