Dollar falls versus the yen, offshore yuan slips on trade woes
The yuan eased against the dollar in offshore trade on Wednesday after the People's Bank of China set its official midpoint not much firmer than its previous close.
The dollar fell against the yen and the yuan weakened, in a sign investors remain wary that China's currency policy has become a new flashpoint in its trade war with the U.S. Оn Monday administration of China responded to raising traffics on its goods by allowing its currency to weaken past the psychologically important line of 7 per dollar.
Market sentiment has deteriorated rapidly as a result, which would support the safe-haven yen and hasten yuan declines. Risk sentiment took a further hit after the Reserve Bank of New Zealand stunned traders by cutting interest rates more than expected, highlighting the growing concern policymakers have about the global economy.
Revived concerns about trade frictions tend to push demand for the safe-haven yen higher. The dollar fell 0.3% to 106.13 yen in Asian trading. On Tuesday, the greenback rallied from a low of 105.51 yen to as high as 107.07 yen in a volatile session sparked by worries about China's currency policy.
The offshore yuan fell to 7.0701 per dollar, not far from 7.1397, the lowest since international trading in the currency began in 2010. The onshore yuan opened trade at 7.0369 per dollar versus its last close at 7.0250.
The dollar index (=USD), which measures the greenback against six major currencies, was little changed on Wednesday at 97.474. The euro stood at $1.1202 (EUR=EBS), flat so far in Asian trading.