The main global currencies were trading with volatility on Wednesday with the dollar and the yen losing ground, and the yuan at its highest level in more than a year as the aggressive stimulus package China provided the final boost to risk appetite.
The US dollar stabilized at near 14-month lows against a basket of similar currencies, trading at 100.45. dollar index fell more than 0.5% in the previous session, its biggest daily percentage drop in a month.
He dollar gained 0.78% to 144.34 yen, while the euro rose 0.87% against the Japanese currency. The pound sterling and the Australian dollar gained more than half a percentage point each.
Chief Analyst of Nordea BankNiels Christensen pointed out the good risk sentiment in Asia following China’s new measures as the reason behind the weaker yen.
Chinese stimulus contributed to a stronger euro during the session, with its resilience driven in part by the perception that an improved outlook for Chinese demand could trickle down to Germany and Europesaid Jane Foley, senior currency strategist at Rabobank.
The euro was up 0.06 percent at $1.1187, nearing a 13-month high of $1.1201 hit in August.
Markets globally were basking in the glow of the latest round of support measures announced by China on Tuesday, ranging from massive rate cuts to aid for its stock market.
In line with its extensive measures, Flexibilityhe People’s Bank of China The Fed also cut its medium-term lending rates to banks from 2.30% to 2.00% on Wednesday.
He onshore yuan rose to a 16-month high of 7.0012 per dollar, while its offshore unit briefly strengthened beyond the key psychological level of 7 per dollar and hit a high of 6.9952 per dollar.
Elsewhere, sterling was down 0.3% at $1.3369 from a previous peak at March 2022 levels as investors turned their attention to the US budget. United Kingdom next month and any tax increases it may include.
Markets are now pricing in a 59.1% chance of a 50 basis point rate cut at the Fed’s next policy meeting. Federal Reserve United States Fedcompared with just 37% a week ago, according to the CME FedWatch tool.
Source: Ambito
