Disappointing Chinese economic data this week is feeding through to the currency market, sending the yuan sinking beyond the psychological 7-per-dollar level.

The offshore yuan slipped to as weak as 7.0076 to the US currency Wednesday, the first time it has breached the 7 level since late December.

China’s industrial output, retail sales and fixed investment all grew at a slower pace in April than economists forecast, prompting calls for more policy stimulus to bolster growth. Meanwhile, rising Treasury yields, helped in part by positive US housing data, aided the dollar.

“The Chinese currency is expected to weaken due to both data weakness and easing monetary policy,” Hao Zhou, chief economist at Guotai Junan Hong Kong Ltd., wrote in a research note.

The People’s Bank of China set the yuan’s reference rate at 6.9748 per dollar Wednesday, broadly in line with the median estimate of 6.9743 in a Bloomberg survey of analysts and traders. The central bank will let the market play a decisive role in the exchange rate and make the yuan more flexible, while keeping the currency basically stable, it reiterated in a quarterly monetary policy report this week.

The majority of investors expect the yuan to appreciate mildly over the next 12 months, according to Bank of America’s latest survey of Asia fund managers. That’s even as expectations for a stronger China economy decline, it said.