Chinese Yuan hits seven-month high, Aussies gain after US delays tariff

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Chinese Yuan hits seven-month high, Aussies gain after US delays tariff

Over optimism of substantial progress in the Sino-US trade war, the Chinese Yuan hits seven-month high on Monday, the 25th of February, while the Aussies and Kiwis had also extended gain despite a risk-on outlook due to RBA’s (Reserve Bank of Australia) comment of interest rates trimming twice this year.

On Sunday (February 22nd), the US President Donald Trump had officially announced that he had been planning to delay the extended tariff on $200 billion worth of Chinese goods, as the US-China trade talk had been making solid progress and had reached a memorandum of understanding on critical six issues dampening the trade talk outlooks last month.

However, followed by the comment of Donald Trump, the offshore Chinese Yuan climbed as high as 6.6737 against American dollar, testing its strongest rally since mid-July, 2017. However, at the day’s closure, the Chinese Yuan gained 0.31 percent to 6.6810 against US dollar and was on course to post three consecutive days of gains.

Given US delegates urge of preventing a devaluation of Yuan during the latest round of trade talk, which China had been deploying to settle the additional US tariffs on exports, Chinese Yuan would likely to extend further gain and so far, Chinese offshore Yuan had climbed 2.7 percent against American Dollar in 2019.

Chinese export dependent Aussies, widely considered as a proxy of Chinese market risk, gained more than 0.50 percent to $0.7181, despite risk-on atmosphere amid RBA’s decision to trim interest rate twice this year.

The US dollar was down by 0.13 percent against a basket of major 6 currencies to 96.48, while euro and pound sterling both posted heavy gains against American dollar in the face of a stack of affirmative Brexit headlines and trade talk optimism.