Yuan Strikes 5-Month Highs, Trade Confidence Retains
Today in the Foreign exchange market, the U.S. dollar came off highs, and the Chinese yuan boosted in Asia.
Moreover, the optimism has improved shore up stock and currency markets over the past couple of weeks.
The surge was when China and the U.S. have settled a phase one trade agreement. The signing could be in early January.
On Thursday, the U.S. President Donald Trump stated there would be signing. In addition, the contract is “getting done.”
Meanwhile, the U.S. Dollar Index inched down 0.03% to 97.50.
The People’s Bank of China establishes the reference rate of the yuan at 6.9879.
On the other side, the PBOC has raised up the reference rate. The midpoint is when the currency will be available to trade. It will be from 0.0266 to 6.9801.
In about five months, the Thursday fix was the highest on the record.
On Friday, the USD/JPY pair inched down 0.16% to 109.45. On the flip side, the yen increased some ground versus the greenback in the forex trading.
The matter happened even as the government circulated worse-than-expected retail sales data this Friday morning.
November from a year earlier, retail sales declined by 2.1%. According to some F.X. news, the actual execution was harsh than the 1.7% decrease that the market is expecting.
Meanwhile, the AUD/USD pair inched up 0.08% to 06950. The pair was aided to a new five-month high by the confidence bordering the trade agreement between the U.S. and China.
In addition, the NZD/USD weakened by 0.09% to 1.4971. The GBP/USD 0.03% to 1.2988, with the pound continuing to go down as the U.K. pushes towards Brexit.
Further Forex Trading Movements
Elsewhere, the dollar soared near a six-month high against the Japanese yen.
The Australian dollar also rose to its sharpest since July on Friday, lifted by easing Sino-U.S. trade tensions.
Beijing indicated last Wednesday it is in close contact with Washington. This is concerning a trade deal signing ceremony.
The contact happened a day after U.S. President Donald Trump stated he and Chinese President Xi Jinping would have a ceremonial to sign the contract.
Overnight, the dollar grew to as high as 109.68 yen compared to the safe-haven Japanese currency. It is a one-week high and not far from 109.73 yen.
In late Asian trade, the pair was at 109.50 yen, down by 0.1% on the day.
A chief portfolio manager for fixed income at Nissay Asset Management, Toshinobu Chiba, said, “Although the gains in the dollar were partly erased by dipping Treasury yields after the seven-year note auction, U.S.-China trade optimism has put a solid floor under the dollar.”
He added, “In any case, I don’t expect large moves either way in markets as trading remains subdued due to the holiday week.”
