reuters LONDON, Nov 21 Emerging But China’s yuan weakened to nearly an 8-1/2-year low as the central bank set its daily guidance rate weaker for a 12th straight session. “The dollar index is at levels last seen in 2001, so it doesn’t surprise me (China) are letting the yuan weaken against the dollar,” said Per Hammarlund, chief emerging markets strategist at SEB, adding there was a danger the weaker yuan could prompt more outflows from China. “If they let this go much further, it could spook the market.” Investors are preparing for more weakness. Dollar-yuan non-deliverable forwards, a derivative used to hedge against exchange rate moves, are up 2 percent since the start of the month and price the yuan just above 7 per dollar in six months time versus the spot rate of around 6.89. At a meeting of Pacific Rim leaders over the weekend, Chinese officials said more countries were looking to join a China-led trading bloc. “China’s comments at the APEC summit underpin the country’s apparent desire to take over any vacuum that a U.S. global trade back-tracking would bring,” said Simon Quijano-Evans, emerging market strategist at Legal & General Investment Management. “A tough one for Asian neighbours that have been positioning themselves between China and the U.S.” In Turkey, the lira took another beating to weaken 0.3 percent, edging back towards the record low hit on Friday as domestic woes exacerbate a tense macro-economic backdrop. This week the governing AKP party will meet with the nationalist opposition MHP to discuss plans to hand President Tayyip Erdogan more power, while the EU parliament debates freezing Ankara’s talks on joining the bloc . A central bank meeting has markets divided on whether policy makers could hike interest rates for the first time in almost three years. Meanwhile in Mexico, which has seen its assets in the crosshairs thanks to Trump’s tough anti-globalisation talk on the campaign trail, the peso strengthened for the second straight session, up 0.5 percent. Data from Nigeria showed that the recession deepened in the third quarter as the economy contracted 2.24 percent and oil production also fell. Africa’s largest economy slid into recession for the first time in 25 years in the second quarter, when a slump in crude prices contributed to a 2.06-percent contraction in the economy. Across central and eastern Europe, currencies firmed slightly against the euro, but hovered near the multi-month lows reached after Trump’s win .and currencies struggled higher on Monday as the post-U.S. election rise in the dollar and U.S. yields lost some steam, though China’s yuan and Turkey’s lira extended losses, the former approaching 8-1/2 year lows. Republican Donald Trump’s unexpected election victory has led to a major repricing of assets, with investors rushing to snap up U.S. stocks and the dollar in anticipation of higher infrastructure spending pushing up inflation. At the same time, they have been dumping bonds and emerging markets. Emerging stocks, which have lost 6 percent since Trump secured the keys to the White House, rose 0.2 percent with gains in Russia, South Africa and China offsetting losses in India and Turkey. Indian shares fell 1.8 percent as uncertainty grew about the full impact of the government’s recent demonetisation move Many currencies such as South Africa’s rand, the Mexican peso and Russia’s rouble, strengthened against the dollar, which pulled back from the 13-1/2-year peak it hit last week.