Trade conflict puts pressure on Chinese yuan

Posted 07 August, 2019

The US dollar decreased against the Japanese currency in the middle of the week. Chinese yuan also posted weakening which means that market players remain concerned about the US-China trade conflict fueled by Beijing's policy.

The US Dollar index has posted just slight changes, staying near 97.575 today.

The US dollar-to-CNH exchange rate decreased to 7.0825 following the decision of PBOC to slightly raise the official rate compared to the closure rate of the previous session.

Meanwhile, CNY rate dropped against the greenback to 7.0475.

At the same time, the US dollar lost positions against the Japanese yen. The rate was recorded at 106.23 at the Wednesday trading.

The euro also dipped against the US dollar. The euro-to-US dollar rate decreased to $1.1194.

The current market sentiments got worse, which is expected to support demand for safe haven (Japanese yen) and boost decline of the yuan, especially given no signs of promt settlement of the long-lasting conflict.

Another safe asset 10Y US state bonds rose in price, which pushed the yield down to 1,68%

Risk assets became even more unattrative once New Zealand unexpectedly reduced interest rate more significatly that it was anticipated. In such way, country' Central Bank highlighted increasing concerns about the global economy.

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