The Chinese currency was seen dipping today as the company’s central bank lowered the official midpoint today. The new decision from the central bank has been the lowest they did from the past five weeks; the dollar surged as a reflex on the decision.
Yuan is set to reach a two-week loss just after Friday ends. The dollar has been bullish as well today not only against the yuan but against several currency pairings as well. Figures show that the dollar index remained bullish today.
The yuan reached the 6.6473 per dollar, reaching its lowest or almost three weeks now. Today’s prices have been the lowest since October 9 and at this rate, the pairing is highly siding with the greenback. The central bank’s decision to move the midpoint has drastically buoyed yuan’s price and it continued to weigh the currency down.
Yuan’s Performance So Far
China has been rising as one of the strongest countries this year, with economic performance being more positive and char topping, what else can we expect then, especially with yuan? All-in-all, the currency managed to score a massive 4.3% increase against the dollar this year at 6.6443.
Analysts are noting that the current volatility of the yuan can be traced towards both the local Central Bank’s decisions and the G10’s future performance as well.
USD’s Bullish Performance
On the other hand, the dollar’s performance was astounding all across the borders with the dollar index rising by an impressive 1% to 0.932 and settling at 94.51. Most of the dollar’s strength is rooted from the European Central Bank’s dovish stature.
The euro also managed to plummet against the stronger dollar today; the main reason for the slump is the “dovish recalibration” from the European Central Bank. The euro dropped by a whopping 0.15% at $1.1633 today, this is a bit of positive news as the currency dips at the $1.1624, the lowest since July 26.
On a note from the Nordea Market’s Holger Sandte from the previous ECB debacle, "The door remains open for a further extension if the ECB feels a need, and there could be some ammunition left even with unchanged purchasing criteria. The outlook for (core) inflation will be decisive,"
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