Yahoo Finance Chinese Yuan Continues Slide, Japanese Yen Up
Investing.com – The Chinese yuan continued a moderate slide on Wednesday morning in Asia with the People's Bank of China (PBOC) once again setting its reference rate lower even as it moved to resume open market operations.
On Wednesday, the PBOC set the reference rate for the yuan at 6.8546 compared to 6.8488 on Tuesday.
After taking a 15-day break from open market operations, on Wednesday the People's Bank of China injected CNY60 billion of liquidity.
The yuan has been sliding against the US dollar since April and has lost more than 9% since then. A weaker yuan could lessen, to a degree, the impact of trade tariffs that the U.S. has Imposed and the further tariffs that U.S. President Donald Trump has threatened.
Speaking on Tuesday during the Easter Economic Forum (EEF) in Vladivostok, Russia, former PBOC Governor Zhou Xiaochuan said the U.S. use of too many financial sanctions could drive people to the yuan.
Trump has threatened to impose sanctions on virtually all Chinese exports to the U.S. with sanctions on $200 billion worth of goods having already gone through public consultations and sanctions on another $267 billion threatened after that.
While sanctions could make Chinese products more expensive in the U.S., a weaker yuan could make them cheaper.
The USD/CNY pair was trading at 6.8742, up 0.03% at 11:00 PM ET (GMT 03:00).
The PBOC and other agencies have been taking steps to support the yuan. In August, the China Foreign Exchange Trade System (CFETS) reintroduced a counter-cyclical factor in setting the value of the currency after a 5% plunge over two months.
The Japanese yen gained some ground on Wednesday morning against the dollar, with the USD/JPY pair down 0.17% to 111.46. On Sept. 10, Japan reported accelerated growth in the second quarter. The Japanese economy grew at an annualized 3% in the second quarter, the fastest pace in two years.
The Australian dollar gave up some ground Wednesday morning. The AUD/USD trade was down 0.29 to 0.7099.
The fall in the Indian rupee against the dollar continued. The USD/INR pair was up 0.21% to 72.705. The rupee has lost about 12% against the dollar this year.
Investors are now looking towards policy decisions by the Bank of England and the European Central Bank on Thursday.
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