In doing so she forms part of China's informal foreign exchange market, allowing residents to skirt the official quota which only allows $US50,000 of foreign currency to be bought and sold each year.

Over the last two weeks, however, our senior citizen trader has noticed a big change in the market.

"Everyone wants US dollars," she says.

"My bag is down to the last $US10 note .... this has never happened before."

Such a rush to dump the yuan in favour of the greenback is a street level signal that ordinary Chinese are once again getting nervous about the prospects for their currency.

Their anxiety stems from 12 consecutive days of currency weakening, from November 4 until Monday, by China's central bank. The yuan strengthened marginally on Tuesday.

This has left the Chinese currency trading at around an eight-year low after falling 7.7 per cent over the last 12 months.


While that move is small by global standards, it is significant given China has a tightly managed exchange rate, which Beijing likes to keep "broadly stable".

It should be noted some of the yuan's weakness is a function of the stronger US dollar, after Donald Trump won the presidential election and amid expectation the Federal Reserve will lift interest rates in December.

But it also shows Beijing is once again facing capital outflow pressures, as nervous Chinese companies and individuals seek safe-haven assets.

It should be remembered capital flight from China earlier in the year spooked global markets and had many speculating Beijing would not be able to hold its currency at relatively high levels.

That much talk about devaluation never eventuated as better economic data, fuelled by China's credit boom, restored some confidence in the local economy.

But this undercurrent of nervousness has not disappeared entirely, as the lack of US dollars on the black market demonstrates.

It can also be seen in the gradual decline of China's foreign exchange reserves, known as the country's war chest.

These have declined by $US880 billion since peaking in June 2014, although still remain at an impressive $US3.12 trillion.


That is, however, the lowest level since March 2011, after a greater than expected decline in October.

Such pressure on the currency and China's foreign exchange reserves is unlikely to moderate over the next year, as analyst expect the yuan to fall further.

UBS is tipping the currency will be trading at around 6.9 to the US dollar by year's end - a modest decline from its current rate.

But it sees the yuan hitting 7.2 to the greenback by the end of next year and 7.5 in 2018.

"We expect capital outflows from China to weaken the yuan against the US dollar further," UBS said in a note to clients.

That suggests the dollar shortage on the black market is not going away and next year investors will once again be focused on the capital outflow story from China.