Yuan Strengthens, Dollar Firm in the Forex Markets

On Thursday, despite the People’s Bank of China (PBOC) setting the official reference rate for the Chinese currency at the weakest level since 2008, the yuan strengthened versus the U.S. dollar in the forex markets.

The USD/CNY currency pair declined 0.2% to 7.0423. Meanwhile, the Chinese yuan was not getting a great deal of public attention this week.

It was after it has overlapped with a closely watched seven-level versus the U.S. dollar. The Treasury department accused Beijing as a currency manipulator.

On Thursday, the PBOC set its daily reference rate at 7.0039 per dollar. On the other side, yuan this week imposed the fundamental level while fixing the one that was not set previously.

The daily fixing today was stronger than they expect it to be, according to news reports forecast.

On the data front in July, China’s U.S. dollar-denominated exports unexpectedly increased from a year ago, but imports glided less than expected.

Last month, the country’s trade surplus was $45.06 billion as recorded on the forex markets, according to customs data.

Further Forex Market Movements

Meanwhile, the U.S. dollar index was a little moved at 97.368. The greenback plunged overnight before improving slightly.

This happened after U.S. President Donald Trump repeated his allegations that the Federal Reserve is not cutting rates fast enough.

In a tweet, Trump indicated “cut rates bigger and faster.” He also added that “our problem” was not China, but the U.S. central bank.

The NZD/USD currency pair retreated 0.2% to 0.6457 after tumbling yesterday following the Reserve Bank of New Zealand’s unexpected decision to cut the benchmark policy rate to an all-time low.

The AUD/USD currency pair also improved by 0.3% to 0.6774.

The USD/JPY currency pair was little changed at 106.20.

Meanwhile, in the forex markets, the dollar against a basket of currencies (DXY) was broadly firm at 97.58. But it declined by 0.1% versus the Australian dollar and the British pound.