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The Chinese Yuan Has Recovered from A 15-Year Low 

Started by PocketOption, Nov 02, 2022, 11:16 am

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The Chinese Yuan Has Recovered from A 15-Year Low 

dollar and yuan

The Chinese Yuan Has Recovered from A 15-Year Low


The yuan retreated from a 15-year low against the dollar on Tuesday as investors dumped safe-haven currencies as market sentiment improved.


Currency traders interpreted the central bank fixing’s violation of the important 7.2 per dollar barrier as a warning that policymakers were okay with further depreciation.


As a result, the onshore yuan CNY=CFXS began at 7.3201 per dollar and quickly fell to 7.3280, its lowest level since December 26, 2007.


The US dollar and US interest rates have been supported by the Fed’s aggressive monetary policy tightening in recent months, and investors are now considering aggressive Fed tightening.


The US dollar fell in early European trade Tuesday as traders assessed the possibility that the Fed will announce a less aggressive interest rate tightening path after its current policy meeting on Wednesday. However, the scale of the December hike is controversial as evidence of economic weakness suggests Fed policymakers will agree to a smaller rate hike of 50 basis points.


Other Currencies


The AUD/USD climbed 0.3% to 0.6420, reversing earlier significant gains amid concerns that the central bank was becoming too lenient on inflation following recent data showing that Australian inflation rose by a more-than-expected 7.313% to a 32-year high in the third quarter.


The EUR/USD climbed 0.3% to 0.9916, with the European Central Bank under pressure to keep raising interest rates after last week’s 75 basis point boost, after data on Monday showed Eurozone inflation hit a fresh high of 10.73% in October.


GBP/USD climbed 0.3% to 1.1507 ahead of the Bank of England meeting on Thursday, expected to result in another interest rate hike with inflation in the double digits.


The USD/JPY declined 0.52% to 147.971 as Japanese authorities announced that the country spent a record $42.8 billion on currency intervention to support the yen this month.


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