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Business Recorder
13-06-2025
- Business
- Business Recorder
China's yuan slips as Middle East tensions rise
SHANGHAI: China's yuan eased against the US dollar on Friday, retreating from a more than two-week high reached overnight, as the greenback rebounded after Israel launched strikes on Iran. Escalating tensions in the Middle East dented global risk appetite, prompting investors to flock to safe-haven assets such as gold and the US dollar. The spot yuan opened at 7.1799 per dollar and was last trading at 7.1767 as of 0253 GMT, 52 pips lower than the previous late session close. Still, traders and analysts said broad weakness in the dollar continues to lend support to the yuan. Yuan slips as investors wait on outcome of US-China trade talks Prior to the market opening, the People's Bank of China set the midpoint rate at 7.1772 per dollar, its strongest since March 28 and 87 pips weaker than a Reuters' estimate. The spot yuan is allowed to trade 2% on either side of the fixed midpoint each day. The official midpoint has been set in line with market estimates possibly due to the fact that the US dollar has been trading sideways and there is less need for policy guidance at this point, Maybank analysts said in a note. The onshore yuan firmed in the late night session on Thursday, hitting its strongest since May 26, as the dollar index fell to its lowest in over three years on weaker-than-expected US inflation data. 'On a trade-weighted basis, the yuan has been underperforming, allowing Chinese exports to maintain relative price competitiveness,' they said, adding that the current level marks a sweet spot for trade negotiations with the US China's trade-weighted CFETS yuan basket index fell to 95.49, the lowest since July 2023, according to Reuters estimates. The offshore yuan has firmed towards 7.17 amid broader US dollar weakness and an improved outlook after the US and China reached agreement on a trade framework, said Chang Wei Liang, currency and credit strategist at DBS. A private property developer launched a US dollar bond sale for the first time since 2023, a sign that stress in China's real estate financing sector may be easing, he said. An index that measures the dollar against six other currencies rose 0.45% and was last at 98.12. The offshore yuan traded at 7.1794 yuan per dollar, down about 0.09% in Asian trade.
Business Recorder
09-05-2025
- Business
- Business Recorder
Australia, New Zealand currencies set for weekly loss as dollar makes comeback
SYDNEY: The Australian and New Zealand dollars are set for a weekly loss on Friday as a hawkish outlook on U.S interest rates lifted the battered greenback, though the direction of travel will now rest on progress in looming Sino-US trade talks at the weekend. The Aussie slipped 0.2% to $0.6387 having fallen 0.4% overnight away from a five-month peak of $0.6515 hit on Wednesday. It is set for a weekly loss of 0.9% to end four weeks of gain, with resistance now at the 200-day moving average of $0.6457. The kiwi dollar eased 0.3% to $0.5886 after losing 0.6% overnight, falling further from a six-month top of $0.6029 hit in late April. In a bearish sign, it broke the bottom of a recent trading range at $0.5894 but still has support at the 200-day moving average of $0.5882. The US dollar received much-needed support after the Federal Reserve held rates steady and signalled it was in no rush to ease. Overnight, futures scaled back the degree of expected policy easing this year to 68 basis points from 78 bps a day earlier. A US-U.K. trade deal has raised hope of progress in Sino-US talks in Switzerland on Saturday, giving the greenback breathing room amid chaos brought about by changing US trade action. US President Donald Trump has said tariffs on Chinese goods will come down from 145%. Australia, NZ dollars bounce on hopes for progress in US tariff stalemate 'The USD is likely to recover in the short-term as investors re-evaluate the change in tone on trade and the likelihood of market-friendly deals,' said Chang Wei Liang, a foreign exchange and credit strategist at DBS Bank. 'Though it is unclear whether his 'deals' could lead to a meaningful reduction in tariffs.' Despite the pull-back in Fed easing expectations, investors still assume the Reserve Bank of Australia will cut its cash rate by 25 basis points to 3.85% when it meets on May 20 given a slowdown in inflation and softness in consumer spending. Across the Tasman Sea, markets are still wagering heavily on a rate cut from the Reserve Bank of New Zealand this month to 3.25%. Swaps imply continued easing to a terminal rate of 2.75%. Westpac Banking on Friday pencilled in an extra RBNZ cut in July to 3%, citing downside risk to the economy from the United States' trade war and associated uncertainty. 'We don't think the RBNZ will be able to see its way through the fog of war by July or even August. Hence, it's likely they will continue to cut the OCR,' said Kelly Eckhold, chief economist at Westpac New Zealand.
Wall Street Journal
13-03-2025
- Business
- Wall Street Journal
Asian Currencies Consolidate Amid Rising Global Trade Tensions
0203 GMT — Asian currencies consolidate against the dollar in the morning session amid rising global trade tensions. 'Elevated trade uncertainty has now become a negative for business confidence, for investment, and for growth,' DBS Group Research's Chang Wei Liang says in a commentary. The outlook for U.S. economic exceptionalism could be fading, the FX & credit strategist says. The Dollar Index is consolidating around the mid-103s, getting little boost from escalating trade concerns, the strategist adds. USD/KRW edges 0.1% lower to 1,450.07; USD/SGD is little changed at 1.3326; USD/CNH is steady at 7.2396. (
