The dollar slipped to multi-week lows in Asian trading on Thursday after fresh reassurance that U.S. interest rate hikes are distant and as riskier currencies drew support from China’s efforts to soothe stock market jitters.
The euro edged to a two-week high of $1.1860 and the Australian and New Zealand dollars clung to gains made in a bounce on Wednesday. Sterling, which has been surging on optimism over the re-opening of the British economy, touched a one-month high of $1.3940.
The dollar index was softer for a fourth straight session, last trading at a two-week low of 92.110, while the Chinese yuan edged up to stand as high as 6.4691 per dollar in onshore trade and has now regained ground lost in tandem with a regulatory-driven plunge in Chinese equities on Tuesday.
A Bloomberg report on a call China’s securities regulator held with banks and brokers to soothe nerves following heavy equities selling also helped sentiment and riskier currencies.
A CNBC report saying China Securities Regulatory Commission told brokerages on the call that China would continue to allow companies to list in the United States offered further support, as did solid rises in Chinese stock indexes on Thursday.
Yuan rises to 1-week high, recovers all loss earlier this week
China's yuan firmed to a near one-week high against the dollar on Thursday, fully recovering losses suffered earlier this week, thanks to a decline in the greenback on global markets and a sharp rebound in China's share
The dollar hovered around a two-week low, weighed down by the latest insistence from Federal Reserve chairman Jerome Powell that rate increases are still some way off.
China and Hong Kong stocks rebounded sharply in morning trade, after a series of official efforts to shore up investor confidence.
Prior to market opening, the People's Bank of China (PBOC) set the midpoint rate at 6.4942 per dollar, 13 pips weaker than the previous fix of 6.4929.
In the spot market, onshore yuan opened at 6.4840 per dollar and rose to a high of 6.4724, the strongest level since July 23. By midday, it was changing hands at 6.4755, 150 pips firmer than the previous late session close.
Reference: Reuters
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