Chinese yuan rose while Japanese yen and Swiss franc fell

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Chinese yuan rose while Japanese yen and Swiss franc fell

The Chinese yuan and the Australian dollar increased slightly after new data showed that China’s factory activity grew at a stronger pace in June. Specifically, the yuan climbed up by 0.1% to 7.072 per dollar in offshore trading on Tuesday.

However, the Aussie soon pulled back and ended the session lower by 0.2% to $0.6854. The FX market shrugged off the news that China’s parliament passed national security legislation for Hong Kong.

Meanwhile, the Japanese yen dropped against the greenback by 0.1% to 107.715 yen per dollar. The safe-haven Swiss franc declined as well. The dollar edged up by 0.1% against the franc to 0.9521.

According to Jeffrey Halley, a market analyst at Oanda, the lack of trading winds looks set to continue, with most of the majors sitting mid-range versus the dollar.

The Euro dropped by 0.3% at $1.1209 on Tuesday. Markets are jumpy as tensions remain between economic and virus pickup – noted Moh Siong Sim, the FX analyst at the Bank of Singapore.

In Britain, the city of Leicester went into a reinforced lockdown. The sterling is under pressure due to concerns about a blowout in British public spending.

The pound traded at $1.2283 after plummeting down to a one-month low of $1.2252 on Monday. Prime Minister Boris Johnson promised to increase spending. However, traders argue about how Britain’s government would pay for its planned infrastructure program.

What about the U.S. dollar?

The greenback edged up higher on Tuesday. The dollar index increased by 0.27% at 97.686 against a basket of currencies.

Investors were torn between concerns that a surge in new COVID-19 cases could jeopardize a fast V-shaped recovery and the optimism about economic growth rebounding. California and Texas saw a record jump in new infections on Monday. But U.S. home sales and Chinese factories’ recent data have been positive.

U.S. Federal Reserve Chair Jerome Powell also warned that the outlook for the world’s biggest economy was extraordinarily uncertain, keeping investors on their toes.

 

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