Yen jumps, yuan slumps on worries China struggling to contain virus

By Stanley White

TOKYO (Reuters) – The yen rose and the yuan fell in offshore trade on Monday as worries that China is struggling to contain the spread of a pneumonia-like virus sparked a bout of risk aversion.

Japan’s currency, often sought as a safe-haven in times of uncertainty, rose to the highest in almost three weeks versus the dollar, while the yuan fell to its lowest since Jan. 8.

China’s cabinet announced it will extend the Lunar New Year holidays to Feb. 2, to strengthen the prevention and control of the new coronavirus, state broadcaster CCTV reported early on Monday. The holidays had been due to end on Jan. 30.

Hong Kong has also banned the entry of visitors from China’s Hubei province, where the new coronavirus outbreak was first reported, highlighting the difficulty officials face during a peak travel season.

Health authorities around the world are racing to prevent a pandemic of the virus, which has infected more than 2,000 people in China and killed 76.

There are concerns that tourism and consumer spending could take a hit if the virus spreads further, which would discourage investors from taking on excessive risk.

“There is a lot of uncertainty about how much further the virus will spread, and this is behind the moves in currencies,” said Yukio Ishizuki, foreign exchange strategist at Daiwa Securities in Tokyo.

“I thought dollar/yen would be supported at 109, but it broke through that, so now the next target is 108.50. This risk-off mood is likely to continue for a while.”

The yen rose 0.3% to 108.91 per dollar on Monday, reaching its strongest level since Jan. 8.

Japan’s currency also jumped around 0.5% versus the Australian () and New Zealand dollars () as worries about the virus drew traders toward safe-haven currencies and away from currencies that are more sensitive to risk.

In the offshore market, the yuan fell more than 0.3% to 6.9625 against the dollar, its weakest since Jan 8.

The () against a basket of six major currencies was little changed at 97.884.

Traders said market moves could be exaggerated due to low liquidity, because financial markets in China, Hong Kong, and Australia are closed for holidays.

The virus, which emerged late last year from illegally traded wildlife at an animal market in the central Chinese city of Wuhan, has spread to other countries, including Singapore, South Korea, Canada, Japan, and the United States.

China’s Hubei province, where Wuhan is located, said on Monday that 76 people have died and 1,423 new cases of the coronavirus outbreak have been identified as of end of Sunday.

The outbreak has evoked memories of Severe Acute Respiratory Syndrome (SARS) in 2002-2003, another coronavirus which broke out in China and killed nearly 800 people in a global pandemic.

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Forex – Yen Gains On Weak Export Data, Virus Fears; Yuan Drops

© Reuters.  © Reuters.

By Alex Ho

Investing.com – The Japanese yen gained on Thursday in Asia gained on Thursday in Asia amid weak export figures and fears about the mysterious virus in China.

The EUR/USD pair inched down 0.1% to 1.1082 as traders awaited the European Central Bank (ECB) policy meeting due later in the day. The meeting will be followed bya press conference with President Christine Lagarde.

The USD/JPY pair lost 0.3% to 109.53 amid ongoing fears about the widening coronavirus outbreak, as authorities ramped up efforts to contain the virus ahead of the weeklong Lunar New Year holiday next week.

The World Health Organisation will decide later on Thursday whether to declare the situation a global health emergency.

On the data front, Japanese exports for December fell 6.3% in December as compared to a year before, data from country’s Ministry of Finance data showed. That was far lower than the expected 4.2% decrease.

The USD/CNY pair lost 0.4% to 6.9283.

The Australian dollar rose 0.2% to 0.6858 after a surprise drop in unemployment.

Meanwhile,the U.S. dollar index that tracks the greenback against a basket of other currencies last traded at 97.335, up 0.04%.

The index traded higher overnight after the National Association of Realtors said pending home sales rose 3.6% to a 5.54 million annual rate. That was the strongest pace of growth since February 2018.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

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Forex – Yuan Falls Amid Trade Uncertainties; PBOC Adds $58B Into Banking System

© Reuters.  © Reuters.

By Alex Ho

Investing.com – The Chinese yuan fell on Wednesday in Asia amid fresh trade uncertainties. While not a directional driver, the People’s Bank of China added $ 58 billion into the country’s banking system.

The pair lost 0.2% to 6.8943 by 12:01 AM ET (04:01 GMT).

Citing people familiar with the matter, Bloomberg reported that existing U.S. tariffs on Chinese goods are likely to stay in place until after the American presidential election in November.

“These tariffs will stay in place until there’s a phase two. If the president gets a phase two quickly, he’ll consider releasing tariffs as part of phase two,” Treasury Secretary Steven Mnuchin told reporters on Tuesday. “If not, there won’t be any tariff relief. So it has nothing to do with the election or anything else. There’s no secret agreements.”

The Bloomberg report came just hours before the signing of the phase one trade deal, suggesting that tensions between China and the U.S. remained high.

Meanwhile, the People’s Bank of China said in a statement that it added 300 billion yuan ($ 44 billion) through the medium-term lending facility at 3.25%. It also injected 100 billion yuan via open market operations.

The that tracks the greenback against a basket of other currencies was little changed at 97.080.

In other news, Bank of Japan Governor Haruhiko Kuroda said in a speech on Wednesday that the central bank would not hesitate to ease further in order to achieve its 2% inflation target.

The slipped 0.1% to 109.88.

The pair and the pair were both near flat.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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China’s yuan gains after U.S. drops China FX manipulator label

By Yoruk Bahceli

LONDON (Reuters) – China’s yuan climbed to its highest level since July on Tuesday and the Japanese yen plumbed eight-month lows as the U.S. Treasury Department reversed its decision in August to designate China as a currency manipulator.

The Treasury Department’s new report on currency manipulators could help explain the reason for the Swiss franc surging to a 33-month high against the euro, some analysts said. [L8N29J36G] Washington included Switzerland on a watchlist, although other market participants said it had been expected and broader safe-haven flows were behind the franc’s move.

The announcement on the yuan came as Chinese Vice Premier Liu He arrived in Washington ahead of Wednesday’s signing with U.S. President Donald Trump of a preliminary trade agreement aimed at easing tensions between the two countries.

“Washington’s decision to lift its designation of currency manipulator on China has added to the positive mood that has been already in place ahead of the signing of the trade deal,” said Minori Uchida, chief currency strategist at MUFG Bank.

People familiar with the negotiations said its removal was an important symbol of goodwill for Chinese officials.

China has also pledged to buy almost $ 80 billion of additional manufactured goods from the United States over the next two years as part of a trade war truce, according to a Reuters source.

The dollar rose as much as 0.3% against the Japanese yen to 110.22 yen , its highest since late May versus a currency that tends to weaken when investors are buoyant. It last stood at 109.97 yen.

In onshore trade, the yuan strengthened to as high as 6.8731 per dollar , its strongest since late July. China’s central bank set the midpoint of the yuan’s daily trading band at 6.8954 per dollar on Tuesday, its strongest fixing since Aug. 1.

The also firmed to its strongest level in six months, hitting 6.8662 yuan before easing off .

Chinese forecast-beating trade data also helped to boost optimism about the economy and the yuan.

Despite the optimism, some analysts said there were signs of a bid for safety.

The Swiss franc rose to its strongest since April 2017 at 1.0763 against the euro (), up nearly 0.5%. It rose 0.4% versus the dollar .

Some analysts said this reflected nervousness, as risky emerging market currencies such as the South African rand and Turkish lira fared poorly.

“The interesting question is how long can this optimism last, how much further can it go. A lot surely has to be in the price,” said Jane Foley, senior FX strategist at Rabobank.

“If we were to get another rise in tensions between the U.S. and China and if we were to turn our attention to phase two (of the trade deal)… it’s very likely that we will see the renminbi falling again,” Rabobank’s Foley said, adding that the currency might face a low at the 7.18 level hit in September.

In Europe, sterling weakened further on Tuesday, hitting a seven-week low against the euro at 85.95 pence before recovering. ()

The currency has come under pressure from weak data releases, raising the chances of a cut to interest rates by the Bank of England. Money markets forecast an almost 50% probability of a cut at a meeting on Jan. 30.

The euro was mildly supported by risk-on sentiment, remaining off a two-week low of $ 1.10855 () hit on Friday, last trading at $ 1.1124.

The gained 0.1% to 97.43 ().

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U.S. to Lift Yuan Manipulator Tag Ahead of China Trade Deal

© Reuters.  U.S. to Lift Yuan Manipulator Tag Ahead of China Trade Deal © Reuters. U.S. to Lift Yuan Manipulator Tag Ahead of China Trade Deal

(Bloomberg) — President Donald Trump’s administration plans to lift its designation of China as a currency manipulator, people familiar with the matter said, removing an obstacle to a trade deal the two nations are set to sign this week.

The Treasury Department will make the move in a semi-annual report, expected to be released soon, after being delayed as the U.S. and China finalize a “phase one” trade pact, said the people, who spoke on condition of anonymity.

Treasury Secretary Steven Mnuchin in August first formally labeled China a currency-manipulator, a move that further escalated the trade war with Beijing after the country’s central bank allowed the yuan to fall in retaliation to new U.S. tariffs.

A Treasury Department spokeswoman declined to comment. A reporter for Fox Business Network earlier tweeted the news about Treasury’s plans.

Now that a deal is in sight, the designation is being lifted. The administration had at one point considered maintaining the label and instead announcing it would monitor the yuan with the possibility of lifting the designation in August of this year, according to the people.

The offshore strengthened to 6.883 per dollar on Monday.

Mnuchin’s August 2019 announcement prompted authorities in Beijing to increase transparency around how they manage the yuan. Some of that data has provided support for the Treasury’s view that the People’s Bank of China engages in competitive devaluations of its currency, the people said.

But economists have criticized the U.S. decision to call China a manipulator. The International Monetary Fund said in September the yuan is fairly valued and that there’s no evidence of manipulation. China’s weakening currency could also be attributed to a slowdown in growth.

China also doesn’t meet the criteria outlined in a 2015 U.S. law for formally designating a country a currency-manipulator. Mnuchin instead relied on a 1988 trade law that has a looser definition of currency manipulation to justify the claim. He did so after the yuan broke the 7 per dollar level for the first time since 2008, drawing Trump’s ire. Mnuchin had resisted using the label in the previous five reports he released.

The August announcement was made in a press release, outside the normal issuance of the report. That left currency strategists and policy experts without a full explanation for the decision. Treasury’s currency report examines 20 countries for possible currency manipulation, a number that was increased from 12 in May.

Trump was involved in drafting the press release, which on his direction refers to China as a “Currency Manipulator,” using capital letters, one of the people said.

When Treasury officials briefed congressional committees in August on their decision, they read quotes by Chinese leadership officials stating that they had all the necessary tools to prop up the yuan. According to the Treasury officials, those statements prove intent and serve as evidence that the country was manipulating its currency, two people familiar with the briefings said.

Mnuchin in October said that if a trade deal with China were signed, he would consider removing the manipulator tag, saying that signing an agreement would be “a big step in the right direction.”

(Updates with market move in sixth paragraph.)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Yuan hits multi-month highs as economy shows signs of stabilization

© Reuters.  © Reuters.

Investing.com – The hit almost five-month highs and the USD continued to retreat on the last day of the year in Asia.

The was down 0.06% to 96.69 by 8:45 PM ET (01:45 GMT), continuing a multi-day slide.

The People’s Bank of China (PBOC) set the reference rate for the yuan at 6.9762, stronger than the 6.9805 fix set on Monday and its strongest point since early August.

China’s economy continues to show signs of stabilization. The official manufacturing purchasing managers’ index for December released by the National Bureau of Statistics (NBS) Tuesday morning came in at 50.2, steady from a month earlier. A reading above 50 signals expansion.

On a positive note, a sub-index that focuses on new orders for export rose above 50 for the first time in 19 months. However, the non-manufacturing PMI fell to 53.5 from 54.4.

The private Caixin PMI is due out Thursday.

The subdued but positive PMI reading comes as China and the U.S. prepare to sign a phase one deal on their ongoing trade war that has hit both economies.

The pair was up 0.17% to 0.7006 and the was up 0.17% to 0.6736. Both currencies have found gains in the dollar’s slide.

The pair was down 0.15% to 108.70. The Japanese has gained some ground against the greenback this week and is ending a volatile year at roughly the same value as where it started.

The was up 0.09% to 1.3125.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Dollar continues slide as yuan strengthens and GBP finds support

© Reuters.  © Reuters.

Investing.com – The U.S. dollar continued to retreat on Monday morning in Asia, with the greenback sliding for the third day in a row.

The was down 0.17% to 96.75 by 10:30 PM ET (03:30 GMT).

The dollar lost ground against most currencies in the region with relatively thin trading ahead of the New Year Holiday on Wednesday.

The pair was up 0.24% to 0.6994 and the was up 0.27% to 0.6716.

The pair was down 0.28% to 109.10 with the Japanese currency set to finish 2019 roughly on par to where it started.

The People’s Bank of China set the reference rate of the yuan at 6.9805, stronger than the 6.9879 fix set on Friday as the yuan continues to strengthen from five months highs.

China’s official Purchasing Managers’ Index (PMI) is due to be released on Tuesday followed on Thursday by the Caixin PMI, both of which will give some indication of the state of the Chinese economy.

Over the weekend, the PBOC ordered the adoption of a new approach to pricing loans. Lenders will be expected to move towards a new loan prime rate (LPR) starting January 1. The LPR is set at 4.15% for a one-year loan, lower than the current benchmark of 4.35%.

Meanwhile, markets continue to look forward to the signing of a phase one trade deal between the U.S. and China but are also looking for any spike in tensions in the Korean peninsula, particularly any missile tests in North Korea around the New Year.

The GBP/USD was up 0.30% to 1.3115, with the pound finding some support after the Ursula von der Leyen, the president of the European Commission, said the EU may need to extend the deadline for Brexit talks.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Yuan hits 5-month highs as trade optimism holds

© Reuters.  © Reuters.

Investing.com – The U.S. dollar came off highs last week and the strengthened on Friday morning in Asia.

Optimism has helped shore up stock and currency markets over the past couple of weeks since China and the U.S. agreed to a phase one trade deal that could be signed in early January. U.S. President Donald Trump said on Thursday that there will be a signing and that the deal is “getting done”.

The was down 0.03% to 97.50 by 8:50 PM ET (01:50 GMT).

The People’s Bank of China set the reference rate of the yuan at 6.9879. On Thursday, the PBOC raised the reference rate, the midpoint around which the currency is allowed to trade, by 0.0266 to 6.9801. The Thursday fix was the highest in about five months.

On Friday, the pair was down 0.16% to 109.45. The yen gained some ground against the greenback even as the government released worse-than-expected retail sales data Friday morning. Retail sales fell 2.1% in November from a year earlier. The actual performance was worse than the 1.7% decline expected by the market, according to Reuters.

The pair was up 0.08% to 06950. The pair was helped to new five-month highs by the optimism surrounding the trade deal between the U.S. and China.

The was down 0.09% to 1.4971.

The 0.03% to 1.2988, with the pound continue to slide as the U.K. moves towards Brexit.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Yuan to gain from U.S.-China deal but vulnerable: ex-currency regulator

SHANGHAI (Reuters) – The will benefit from a de-escalation of Sino-U.S. trade tensions but is vulnerable to possible volatility in cross-border capital flows, a former Chinese foreign currency regulator told the China Business News.

The interim deal reached by Washington and Beijing means trade frictions have ameliorated, reducing uncertainty and boosting market confidence in the yuan, the newspaper said, citing Guan Tao, a former official at the State Administration of Foreign Exchange.

Guan warned, however, that a slow recovery in global growth and lofty asset prices could cause global market fluctuations, which in turn could bring wild swings in cross-border capital flows that impact expectations regarding the yuan.

Guan expected China to use both macroeconomic and structural monetary policy tools to counter an economic slowdown next year, China Business News reported.

But China should learn lessons from Japan’s experience and refrain from using strong stimulus, which could result in asset price bubbles and long-term economic stagnation, Guan was quoted as saying.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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Yuan and Aussie off four-month high, sterling ticks up

By Hideyuki Sano

TOKYO (Reuters) – The and the Australian dollar hovered below four-month highs touched last week in early Monday trade as investors pored over the U.S.-China trade deal, while sterling stayed strong after a decisive UK general election.

Washington and Beijing cooled their trade war last week, reducing some U.S. tariffs in exchange for what U.S. officials said would be a big jump in Chinese purchases of American farm products and other goods.

The last-minute agreement that averted additional tariffs on Chinese goods totaling $ 160 billion had lifted the yuan and the Australian dollar and had pushed down the safe-haven yen and the dollar last week, before profit-taking set in.

“It is not that markets are unhappy with the agreement but we will inevitably see some position adjustments as we approach the year-end holiday period,” said Yukio Ishizuki, senior strategist at Daiwa Securities.

The traded at 7.0026 yuan per dollar , slipping back from a four-month high of 6.9247 per dollar hit last week.

The trade-sensitive Australian dollar fetched $ 0.6876 , easing from Friday’s four-month high of $ 0.6930

The euro stood at $ 1.1126 (), up 0.05% so far in Asia, off four-month peak of $ 1.1200 set in Asian trade on Friday.

The dollar traded at 109.40 yen , having risen to 109.71 yen on Friday.

Some analysts also noted investors may need to read the fine print of the deal, which has yet to be officially signed.

U.S. Trade Representative Robert Lighthizer said on Sunday the deal will nearly double U.S. exports to China over the next two years and is “totally done” despite the need for translation and revisions to its text. A date for senior U.S. and Chinese officials to formally sign the agreement is still being determined, he added.

“We have seen over time more reports about the differences between what U.S. said and what China said about the agreement,” said Takafumi Yamawaki, head of fixed income research at JPMorgan (NYSE:) Securities in Tokyo. “The U.S. talks about the size of U.S. farm products China will buy but China stayed mum.”

Many traders were also skeptical whether there will be any another deal after the latest one, which the Trump administration has called “phase one”, given the fundamental differences over key issues such as intellectual property rights.

Elsewhere, sterling gained 0.2% in early Asian trade on Monday to $ 1.3353 .

It has risen to $ 1.3516 on Friday, a high last seen in May last year, after British Prime Minister Boris Johnson won a commanding election victory last week, enabling him to end three years of deadlock over Brexit.

Johnson’s government is expected to bring the Withdrawal Agreement Bill back to parliament before Christmas, to allow Britain to exit the European Union by Jan. 31.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

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