June 3, 2023

Dubai Week

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The dollar appreciated to a two-year low and the Chinese yuan depreciated

The dollar appreciated to a two-year low and the Chinese yuan depreciated

On Monday the US dollar rose to a two-year high, a wave of risk aversion swept global markets, while the Chinese yuan recorded its biggest three-day loss in almost four years, raising concerns about the world’s second recession. The largest economy.

The war in Ukraine entered its third month and fears of a COVID-19 eruption across China triggered a sharp fall in Chinese stocks, with investors abandoning currencies such as the Australian dollar and the Chinese yuan in maritime transactions.

The dollar index, which measures the greenback against six major currencies, rose to 101.86, its highest level since March 2020. It traded up 0.7 percent at 101.76, the biggest one-day increase in the percentage. Terms starting March 11th.

The Chinese currency fell to a one-year low against the dollar and traded in late trade, falling 0.9 percent to 6.5615 yuan against the dollar.

The People’s Bank of China (Central Bank) said in a statement on its website: Finance. ”The move is aimed at reducing the yuan’s depreciation.

“We expect this reduction in reserve demand to reduce the depreciation of the yuan in the short term, however it depends on the broader trajectory of the US dollar and China’s growth sentiment,” Goldman Sachs said in a research note.

The Australian dollar, which was one of the biggest gainers in the first quarter of 2022, fell on higher commodity prices. It was down 0.9 percent against the US dollar, while the Japanese currency was down 1.4 percent at 91.88 yen.

The Norwegian krone traded down nearly two per cent against the US dollar at 9.1250 in late trade.

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Indicators measuring the volatility of currency markets rose, and one of them rose to a one-month high.

The small profits of the euro were quickly eroded by the election victory of French President Emmanuel Macron, who defeated his right-wing rival, Marine Le Pen. The European currency was down 0.9 percent at $ 1.0717.

Hawkish comments by several policymakers over the past week have raised concerns that global central banks could tighten monetary policy. Money markets expect the US Federal Reserve to raise interest rates by half a percentage point in its next two meetings. The European Central Bank is expected to raise interest rates by 25 basis points in July.