He global dollar remained stable on Tuesday, while the yuan picked up the momentum of investor satisfaction over the mega stimulus plan announced by China to revive its ailing economy.
He dollar indexThe U.S. dollar, which measures the U.S. currency against six rivals, was down slightly at 100.86, not far from a one-year low of 100.21 hit last week.
He euro The euro was up 0.1% at $1.1123. The single currency fell around 0.5% on Monday as weak euro zone business activity reports raised expectations for more rate cuts by the central bank. European Central Bank (ECB)Reuters reported.
The US dollar hit a 20-day high against the yen and continued to strengthen after the Bank of Japan (BoJ) signaled last week that it was in no rush to raise rates. Dollar/yen rose 0.3% to 144.06.
Meanwhile, markets are divided at the moment on whether the United States Federal Reserve (Fed) will opt for another 50 basis point cut or a 25 basis point cut in November, the CME Fedwatch tool shows.
Elias Haddad, Senior Market Strategist at Brown Brothers Harrimansaid the market was overestimating the Fed’s ability to ease monetary policy. “However, strong US employment data will likely be needed to trigger a substantial upward reassessment of expectations for the federal funds rate.”
The yuan hit a 16-month high
He yuan Chinese stocks hit a 16-month high on Tuesday after stimulus measures sparked enthusiasm in markets.
China’s new measures – including a planned 50 basis point cut to banks’ reserve requirements and a signal of possible further easing of lending rates, as well as measures to support the property market – gave its currency a boost.
Although the yuan The dollar initially weakened in offshore trading after the rate cuts were announced, then rose steadily to 0.38% at 7.0310 per dollar as attention shifted to the potential boost to growth. China-sensitive assets such as stocks, commodities and the euro rose in tandem.
Source: Ambito
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