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Yuan rebounds from month-low

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The Chinese Yuan rallied on Thursday from a one-month low against a stronger Dollar the day before, as heightened demand surpassed disappointing economic data.

 

Broad Dollar strength, reinforced by higher expectations the Fed may start tapering from November and a potential rate hike in late 2022, led to profit-taking and more investors converting Dollars into Yuan, Reuters reports.

 

In addition, banks bolstered their Yuan positions ahead of Golden Week getting underway on Friday, with Chinese markets closed for the week.

 

Before the market opened, the People's Bank of China (PBOC) set the midpoint rate at 6.4854 per Dollar, which is 192 pips or 0.3% weaker than the prior fix of 6.4662, and the weakest since 27 August.

 

The onshore Yuan came back from a one-month low of 6.48 per dollar on Wednesday, and by midday hit 6.4680, 35 pips stronger than the previous late session close.

 

Moreover, the global Dollar index stood at 94.285 by midday, whilst the offshore Yuan was trading at 6.4726 per Dollar. 

 

Elsewhere, the Australian Dollar stood at $0.7204 on Thursday following a 0.9% overnight loss to a five-week low of $0.7170. The break in support at $0.7220 led to new short selling by momentum funds potentially looking at the August low of $0.7107, the Reuters report adds.

 

“We expect AUD to remain heavy while there is uncertainty about the U.S. and Chinese economies,” said CBA analyst Joseph Capurso. “We stick with our assessment of risks that AUD could dip below $0.7000 before the end of the year.”


The New Zealand Dollar was at $0.6884 at the time of writing, after an overnight loss of 1.4% to a five-week dip of $0.6860. The break of support at $0.6982 and $0.6940 led to a bearish technical outlook, risking a test of its August low of $0.6807.

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Mauritius,
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Lithuania,

media contact

About

deVere Group – Foreign Exchange’s Public Relations Department deals with all areas of the media and external communications including international, national, regional, local, trade, consumer, print, broadcast, social and online. The Department aims to provide a helpful service to journalists, broadcasters and editors, amongst others, and reply to all media enquiries, including urgent enquiries out of hours, within agreed deadlines.

Contact

Our press office does not have access to client details and will not be able to assist with individual client enquiries. Please contact deVere Group – Foreign Exchange’s Head of Public Relations on [email protected] or call +44 2071220925.