Home Forex News Yuan gains on hopes of COVID policy easing; dollar slides

Yuan gains on hopes of COVID policy easing; dollar slides


Yuan gains on hopes of COVID policy easing; dollar slides By Reuters

Breaking News


Economy 3 hours ago (Nov 28, 2022 11:25PM ET)

(C) Reuters. U.S. Dollar and Euro banknotes are seen in this illustration taken July 17, 2022. REUTERS/Dado Ruvic/Illustration

By Harish Sridharan

(Reuters) – The yuan jumped on Tuesday ahead of a COVID-19 press briefing in China later in the day that is spurring hopes of a potential easing in the country’s strict pandemic restrictions following an unprecedented episode of unrest.

The offshore yuan was nearly 0.9% stronger at 7.1832 per dollar after a statement from the country’s National Health Commission said its representatives and others from two agencies involved in disease control and prevention would speak at a COVID press briefing at 0700 GMT on Tuesday.

“People are getting quite excited about some sort of reopening,” said Alvin Tan, head of Asia FX strategy at RBC Capital Markets.

The U.S. dollar, which rallied in the previous session on mounting worries over China’s COVID situation, pared some of its overnight gains and moved broadly lower.

The Aussie, often used as a liquid proxy for the yuan, rose 0.77% to $0.6704. The kiwi similarly gained 0.71% to $0.6204.

Sterling edged 0.36% higher to $1.2001.

Rising tensions in China over the country’s stringent pandemic measures sent investors flocking to the safe-haven dollar in the previous session, which triggered a slide of more than 1% in the antipodean currencies and sterling overnight.

Police on Monday stopped and searched people at the sites of weekend protests in Shanghai and Beijing, after crowds there and in other Chinese cities demonstrated against the country’s strict zero-COVID policy.

Protests have spread to at least a dozen cities around the world in a show of solidarity.

Elsewhere, the euro was up 0.38% at $1.03795, after surging to a five-month peak of $1.0497 overnight.

European Central Bank President Christine Lagarde said overnight that euro zone inflation had not peaked and it risked turning out even higher than currently expected, hinting at a series of interest rate hikes ahead.

Flash euro zone inflation figures for November are due on Wednesday, with economists polled by Reuters expecting inflation to come in at 10.4% year-on-year. Ahead of that, inflation numbers from Spain and Germany are expected later on Tuesday.

“The central bank commentary that we’ve had this week, including from Lagarde, has got the market on guard for the risk that the ECB is going to raise rates by 75 basis points at its December meeting rather than 50 basis points, which had been a strong consensus up until the last few days,” said Ray Attrill, head of FX strategy at National Australia Bank (OTC:NABZY) (NAB).

The Japanese yen last traded about 0.2% higher at 138.68 per dollar.

Against a basket of currencies, the U.S. dollar index fell 0.31% to 106.29, after rising 0.5% overnight.

The greenback remained marginally supported by hawkish Federal Reserve speakers overnight.

St. Louis Fed President James Bullard said the Fed needed to raise interest rates quite a bit further. Similarly, New York Fed President John Williams said the U.S. central bank needed to press forward with rate rises, but he did not say how fast or how far it would need to boost short-term borrowing costs.

“The Fed rhetoric we’ve heard from some of the speakers in the last 24 hours is sending a relatively hawkish message, which is somewhat at odds with market pricing,” said NAB’s Attrill.

Comments from Fed Chair Jerome Powell on Wednesday will be watched for new signals on further tightening, with key U.S. jobs data for November due on Friday. The U.S. central bank is widely expected to hike rates by an additional 50 basis points when it meets on Dec. 13-14.

Yuan gains on hopes of COVID policy easing; dollar slides

Asia FX shrugs off hawkish Fedspeak, China in focusBy Investing.com – Nov 28, 2022

By Ambar Warrick
Investing.com– Most Asian currencies recovered sharply from recent losses on Tuesday despite hawkish signals from the Federal Reserve, with focus remaining…

Dollar rebounds on Fed expectations, Aussie dropsBy Reuters – Nov 28, 2022

By Karen Brettell NEW YORK (Reuters) – The dollar clawed back earlier losses on Monday as a hawkish Federal Reserve official laid out the case for further rate hikes, while the…

The yuan’s the new dollar as Russia rides to the redbackBy Reuters – Nov 28, 2022

By Elena Fabrichnaya and Samuel Shen MOSCOW/SHANGHAI (Reuters) – Chinese entrepreneur Wang Min is delighted about Russia’s embrace of the yuan. His LED lights company can price…

Our Apps

Terms And Conditions
Privacy Policy
Risk Warning

(C) 2007-2022 Fusion Media Limited. All Rights Reserved.

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.

Related News