Fri, March 29, 2024

Chinese Yuan still low, while U.S. dollar soared on Monday

Asia's vulnerabilities have resulted in the yuan's volatility

The Chinese Yuan was flat at 7.1380 on Monday. However, it collapsed to a six-week low of 7.1555 against the dollar in the offshore market during the last session. If the Yuan declines again, the next levels to watch would be early-September low of 7.1975 or the mid-March low of 7.1651.

Investors’ fears that last year’s U.S.-China dispute will be re-ignited over the coronavirus pandemic caused the Yuan’s fall. U.S. President Donald Trump, as well as Secretary of State Mike Pompeo blamed China for the pandemic, as many believe the new coronavirus originated from the central Chinese city of Wuhan.

Pompeo stated on Sunday that there was a significant amount of evidence about the virus emerging from a Wuhan’s laboratory. Pompeo did not provide evidence and he didn’t dispute a U.S. intelligence conclusion that the coronavirus was not human-made. However, one can read the comments as Washington’s pressure on China as U.S. deaths and economic damage increase.

Analysts are speculating if the United States plans to attack China again with more trade tariffs or by canceling the payments on the U.S. Treasurys that China owns. Still, they all agree that the dollar/yuan cross would see more volatility.

Lee Hardman, a forex strategist at MUFG, stated that a re-escalation in U.S.-China trade tensions has the potential to end to the stability in USD/CNY.

What about other major currencies?

The U.S. dollar skyrocketed against the most major currencies on Monday. The Japanese yen, the ultimate safe-haven, was the only one that rose against the greenback, last trading up by 0.2% at 106.71.

The dollar rose against Scandinavian currencies as well, which are very vulnerable to global trade risks. The Swedish crown declined by 0.6% at 9.8995 versus the dollar, while the Norwegian crown dropped by 0.8% at 10.3975.

The European currencies also lowered. The euro fell by 0.4% at $1.0932, and Sterling slid by 0.4% to $1.2442.

Simon Harvey, the currency analyst at broker Monex Europe, noted that this morning’s session is being dominated by risk-averse trading as investors fear the negative consequences to global growth from another escalation in U.S.-China tensions.

YOU MAY ALSO LIKE

Wibest – NZD/USD: New Zealand dollar notes and coins.

Quick Look: NZD/USD drops below 0.6000 due to a stronger USD and

Dollar edges back from a 16-month peak

Quick Look: The dollar strengthens against major currencies before the crucial U.S.

Ford

Quick Look: CVA Family Office LLC snaps up 4,559 shares of Ford

COMMENTS

Leave a Comment

Your email address will not be published. Required fields are marked *

User Review
  • Support
    Sending
  • Platform
    Sending
  • Spreads
    Sending
  • Trading Instument
    Sending

BROKER NEWS

Plus500 Expands Office Space in Haifa and Boosts Hiring

Plus500 has significantly expanded its Haifa office space and increased recruitment efforts across various departments. Local news source Walla reports the brokerage has leased an additional 5,800 square meters in the Gev-Yam complex

BROKER NEWS

Stock Report – stock exchange background – WibestBroker

Plus500 Expands Office Space in Haifa and Boosts Hiring

Plus500 has significantly expanded its Haifa office space and increased recruitment efforts across various departments. Local news source Walla reports the brokerage has leased an additional 5,800 square meters in the Gev-Yam complex in