Facebook Pixel

News

Yen, yuan and Australian Dollar. All you need to know about currencies today

Yen, yuan and Australian Dollar. All you need to know about currencies today

Avatar
Jim Anderson - Public Relations

The US dollar declines slightly against the yen on Wednesday after rising the day before, the Australian dollar is significantly cheaper against the US currency on the assumption that the Central Bank of Australia will follow the example of the New Zealand central bank and reduce the rate at the next meeting. Meanwhile, the Chinese yuan again declined against the dollar as the National Bank Of China (Chinese Central Bank) set the reference exchange rate at 6.9996 yuan per $1.

The Chinese national currency earlier this week reached a psychological mark of 7 yuan per $1, provoking criticism from US President Donald Trump against the Chinese Central Bank and worrying about the global market. The yuan is trading at 7.0439 yuan per $1, compared with 7.0264 per $1 on Tuesday.

The Australian dollar fell against the US dollar at 8:00 London time by 0,64% to $0.6718 against $0.6761 on the previous business day. At a certain point in trading, the Australian national currency fell to $0.6677, reaching a minimum, last recorded in 2009. The pressure on the Australian dollar was exerted by the decision of the Central Bank of New Zealand to reduce the key rate by 50 basis points – more significantly than analysts had expected. The regulator explained his decision by an attempt to prevent the consequences of a slowdown in the global economy.

The dollar against the yen at 8:11 London time fell by 0.2% to 106.26 yen compared to 106.47 yen at the close of the previous session. The euro against the yen also fell by 0.2% to 119.00 yen against 119.24 yen the day before. The value of the euro against the dollar grew to $1.1201 compared with $1.1199 following the session on Tuesday. The New Zealand dollar fell 1.84% against the US dollar to $0.6529 at the end of the previous trading day.

 

Fed and trade war: double strike

Fed and trade war: double strike

Avatar
Erik Holm - Head of media

Judging by the dynamics of the futures, on Wednesday the US stock market will open up with a sharp growth the day after the largest daily decline for the year due to the escalation of the trade conflict between the US and China. At 1 p.m. London time, the DOW blue-chip index futures rose by 250 points or 1%, futures on the S&P 500 rose by 27 points or 1%, and futures on the high-tech Nasdaq 100 traded higher by 87 points or 1.2%.

Wall Street recorded the worst trading session in 2019 on Monday. The S&P 500 index fell by 3% amid a tougher trade was between the US and China. The S&P 500 index declined for six consecutive trading sessions until Tuesday and is 6% below its record level recorded on July 26.

Sales on stock markets began last week when Fed Chairman Jerome Powell made statements in favor of a tighter monetary policy compared to forecasts of market players. These statements were made at a press conference on July 31 after the end of the Fed meeting. On Monday, the negative reaction of the markets became more apparent when the Chinese authorities allowed the yuan to drop below the psychologically important level of 7 yuan per dollar when the yuan fell to its lowest level since the global financial crisis of 2008. Some investors see the change in the Chinese currency rate as an immediate response to Trump's latest threat to impose new duties on Chinese goods

This led Washington to call China the currency manipulator for the first time since 1994, which sharply increased tensions in the ongoing trade conflict between the two largest economies in the world.

China-US trade war: Yuan stabilized

China-US trade war: Yuan stabilized

Avatar
Jim Anderson - Public Relations

China responded to President Donald Trump about his tariff threats of another escalation of the trade war on Monday, allowing the yuan to drop to its weakest level in more than a decade and asking state-owned companies to suspend imports of US agricultural products. The yuan rate at auction on the exchanges of mainland China on Tuesday fell to a minimum for 11 years – 7.0699 per dollar.

Beijing on Monday revealingly allowed the currency to break the 7 per dollar mark for the first time since late 2008 after U.S. President Donald Trump announced a decision to impose a 10% duty on Chinese imports worth $ 300 billion, breaking the ceasefire in the trade war. Analysts assessed China's actions as a signal that the country does not intend to make concessions. This means that the trade war which has already affected global economic growth will only be tightened.

The United States officially called China a currency manipulator, and NBC began to restrain the strong rate of depreciation of the national currency. China has taken steps to slow down the falling of the yuan, as the effects of the depreciation on Monday continued to put pressure on the market. The National Bank of China has established a daily currency fix stronger than analysts expected and announced the planned sale of bonds in RMB in Hong Kong. These steps, taken a few hours after the United States called the country a currency manipulator, helped to boost the offshore yuan.

Dollar Extends Post-Fed Gains

Dollar Extends Post-Fed Gains

Avatar
Erik Holm - Head of media

The US dollar is rising to a basket of major world currencies during the Asian session on Thursday after the Federal Reserve System (FRS) made it clear that lowering the base interest rate is not the beginning of a cycle of easing monetary policy.

According to the results of the July meeting, the Fed lowered the interest rate on federal credit funds by 0.25 percentage points to 2-2.25% per annum. The reduction was the first since 2008 and coincided with the forecasts of analysts and market participants. At the same time, the head of the Federal Reserve Jerome Powell made it clear that the action of the Central Bank is not the beginning of a cycle of easing monetary policy. Earlier, most experts expected another decrease in the cost of lending before the end of this year.

However, despite the stated readiness for action, it was completely unlikely that the Fed really seeks to actively soften the policy. As a result, the Bank’s verdict turned out to be less pigeon than the markets expected. Accordingly, after its release, EUR / USD immediately fell to the 1.11 mark and updated the 26-month low in the region of 1.1085, and the dollar index bounced to the maximum since May 2017 at 98.40. The probability of a Fed rate cut in September was revised by markets from 78% to 68.5%.

 

The US dollar rose, the pound continued to fall

The US dollar rose, the pound continued to fall

Avatar
Erik Holm - Head of media

On Tuesday, the US dollar rose against other major currencies. Investors expect the Fed to lower interest rates, while the pound continues to fall in price due to fears about a “tough” Brexit.

By 15:38 London time, the US dollar index, which shows the value of the dollar against a trade-weighted basket of six major currencies, rose 0.1% to 97.877.

On Tuesday, the two-day Fed meeting begins, at which a decision on monetary policy will be made. Analysts predict that on Wednesday the interest rate will be reduced by at least 25 basis points. After the publication of positive US economic data, including data on US GDP growth, forecasts for a reduction in interest rates by 50 basis points weakened.

The pound continued to decline after falling 1% on Monday. New British Prime Minister Boris Johnson told Irish Prime Minister Leo Varadkar that he wants to remove the UK from the European Union by October 31, regardless of the agreement on the terms of this exit.

The GBP / USD pair dropped 0.5% to 1.2159, the EUR / USD pair changed to the position of 1.1144, and the USD / CAD pair rose 0.1% to 1.3178.