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Yuan Inches Up as Mnuchin Resumes Talks with China Vice-Premier

11/13/2018, 5:03:30 PMTrading Strategies
Yuan Inches Up as Mnuchin Resumes Talks with China Vice-Premier

The yuan inched up against the dollar on Tuesday following reports that U.S. Treasury Secretary Steven Mnuchin had resumed talks with China Vice Premier Liu He.

Citing sources, the Wall Street Journal reported on Monday that Mnuchin and He spoke by telephone last week.

The WSJ added that the discussion did not lead to any breakthrough regarding the trade dispute between the U.S. and China.

U.S. President Donald Trump is due to meet his Chinese counter Xi Jinping at the Group of 20 nations summit later this month.

Separately, Reuters reported on Tuesday that major state-owned Chinese banks are selling US dollars in the onshore spot forex market at around 6.97 CNY/USD in an attempt to stem the decline in the yuan.

The USD/CNY pair slipped 0.14% to 6.9551 by 1:10AM ET (06:10 GMT).

The People's Bank of China (PBOC) set the yuan reference rate at 6.9629 vs Monday's fix of 6.9476.

Meanwhile, the Japanese yen, which is widely considered a safe-haven asset, dropped against the dollar despite a tech-led slump on Wall Street overnight.

The USD/JPY pair traded 0.14% higher to 114.00. Renewed U.S.-China trade optimism was cited as the catalyst for the selling in the yen.

Elsewhere, the U.S. dollar index that tracks the greenback against a basket of other currencies declined 0.2% to 97.35.

The GBP/USD pair declined for a third day as traders waited to see if UK Prime Minister Theresa May would ditch her Brexit plan, while the euro fell to 16-months lows amid more worries on Italy’s budget.

The AUD/USD pair and the NZD/USD pair gained 0.6% and 0.5% respectively.