Forex - Euro hits 2-week highs as China devalues yuan for second day
Investing.com
Published Aug 12, 2015 18:00
Euro hits 2-week highs against dollar as yuan drops for second day
Investing.com - The euro rose to two week highs against the dollar on Wednesday after China devalued the yuan for the second day, as investors continued to unwind euro-funded positions on the Chinese currency.
EUR/USD was up 0.67% to 1.1115, the most since July 27.
The yuan fell sharply against the dollar for the second straight day on Wednesday after the People's Bank of China set the yuan's midpoint rate weaker than at Tuesday's closing.
China devalued its currency by 2% in a surprise move on Tuesday to make its exports more competitive and shore up growth in the flagging economy.
The PBOC has described the move as a “one-off depreciation”, based on a new way of managing the exchange rate that better reflected market forces.
The euro jumped to six month highs against the yuan, with EUR/CNY rising 2.5% to 7.15. Meanwhile, the yuan fell to a four year trough against the dollar.
The dollar was lower against the yen, with USD/JPY down 0.52% to 124.45.
The yen was boosted by increased safe haven demand as steep declines in equity and commodity markets hit demand for riskier assets.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down 0.53% to 96.72, as the stronger euro weighed.
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Written By: Investing.com
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