New York

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London

36912

Tokyo

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Dollar moves lower, Yuan hits week-high on Biden-Xi Jinping talks

10 Sep 2021

The edged down on Friday as pro-growth currencies moved up following a rise in the Chinese Yuan on news U.S. President Biden and Chinese president Xi Jinping held talks.

 

A White House statement said the two leaders held “a broad, strategic discussion” focused on climate change, the economy and the pandemic.

The Yuan gained 0.2% on the Dollar following the news, distancing itself from the key 6.50 Yuan per Dollar level to 6.4387 - the highest since 3 September.

“We have seen USD/CNH go offered on the news and any surprise improvement/reset in U.S.-China relations could see USD/CNY move further away from the key 6.50 threshold,” according to ING strategists.

“Such a move is typically positive for pro-cyclical FX and slightly negative for the dollar - hence our down arrow in the Dollar today,” they added.

The Australian Dollar edged up 0.35% to $0.7392, on track for a 0.7% slide this week. The New Zealand Dollar also received a boost from the Yuan move, gaining close to 0.5% to reach $0.7141, Reuters reports.

The Japanese Yen lost 0.2% against the Dollar to 109.97 Yen while still hovering in the middle of its range of the past two months.

Furthermore, the Dollar index – measuring the currency against six major rivals – fell 0.1% on the day at 92.421, though remains on course for a 0.35% weekly gain.

Last week the Dollar index dropped to its lowest since 3 August as data revealed a seven-month low in job creation in the United States, lowering the prospect of an impending reduction in the Federal Reserve’s asset-purchase programme.

The Euro rose 0.1% at $1.1838 on Friday, in line for a 0.35% fall this week. The currency received a degree of support overnight after the European Central Bank said it would reduce emergency bond purchases over the next quarter.