On Monday, the 5th of August 2019, the China’s offshore Yuan went through a wobbling trickle of more than 1 percent to post its eleven-year-low figure over ratcheted up frets of a withering escalation of a yearlong Sino-US trade abrasion entering into its second year, while a gauge of Asian currencies of export-oriented nations have been witnessing a genocidal experience, but euro and pound sterling appear to be upbeat so far over renewed optimisms of a September rate-cut following Friday’s (August 2nd) US employment data.
Although, offshore Chinese Yuan was whooshed below 7 per American dollar for the first time more than a decade, several market analysts had been quoted saying that Yuan would likely to find a robust support at 7 level, given the extent of tempestuous trade outlook following Trump’s latest tweet that China tariff could be hiked much higher.
While this report was being prepared, during late-midday Asian trading hours, Chinese Yuan dwindled more than 1.50 percent to 7.0770 after falling to as low as 7.1097 per US dollar in offshore trading. Meanwhile, adding that the People’s Bank of China (China’s Central Bank) was stemming Yuan’s fall to cover up added expenses for 10 percent tariff hike on $300 billion Chinese imports, a senior currency analyst at MUFG Bank, Masashi Hashimoto said, “This could well be the biggest moment for the yuan this year.
The impact of U.S.-China trade is turning out to be very big. Looking at the mid-point, the People’s Bank of China is trying to stem the yuan’s fall. The PBOC doesn’t look like it is trying to use a weaker yuan to counter U.S.
trade pressure. The yuan’s fall seems to be stemming from panicky selling”. Elsewhere in export-dependent Asia-Pacific nations, the Australian dollar drowns more than 0.5 percent to $6770 after hitting its seven-month low figure at $6748 and the Korean Won shrugs off more than 1 percent to hit its three -year low at 1,218.3 per dollar, while new Taiwan dollar was 0.5 percent down to 31.61 per US dollar during late-midday Asia-Pacific trading hours.
Nonetheless, American dollar has been forced on to the back foot against safe-haven currencies likes of Japanese Yen and safe-haven commodities such as gold, while Yen gains 0.62 percent against American dollar to 105.94 near January’s FX flash-crash level, and spot gold gains 0.84 percent to $1452.70 per ounce.