Hope Of Trade Talks Lifts Yuan
The Chinese yuan got a shot in the arm Thursday morning in Asia from reports that the U.S. is proposing new trade talks as part of an effort to reduce trade tensions.
U.S. Treasury Secretary Steven Mnuchin is reportedly working to meet with China’s top economic officer Liu He after months of stalled negotiations and less than a week after President Donald Trump threatened to escalate the ongoing trade war by extending tariffs to virtually all Chinese exports to the U.S.
The dollar slid 0.18% against the Chinese yuan, with the USD/CNY pair down 0.18% to 6.8480 at 10:50 PM ET (GMT 02:50). On Thursday, the People’s Bank of China (PBOC) set the reference rate for the yuan at 6.8488 compared to 6.8546 a day earlier.
The yuan has been sliding against the US dollar since April and has lost more than 9% since then.
The US Dollar Index was up 0.02% to 94.82.
The Japanese yen lost a little ground against the dollar Thursday and was trading at 111.35, a 0.07 percent slide against the USD. The yen ended Wednesday on an upbeat, recouping losses from Tuesday.
The yen is getting some support from some relatively positive economic news. Japan’s BSI Manufacturing Index rebounded with a 6.5 gain, positive but short of estimates for an 8.0 point bump. Data out earlier in the week showed Japan’s economy grew at an annualized 3% in the second quarter, the fastest pace in two years. GDP growth of 0.7% in the second quarter matched estimates.
The Australian dollar regained some ground on Thursday. The AUD/USD was up 0.24% to 0.7186. The Aussie recovered from lows it has not seen since 2016 on the news of potentially revived U.S.-China news.
Investors are now looking towards policy decisions by the Bank of England and the European Central Bank on Thursday.