🚀 AI-picked stocks soar in May. PRFT is +55%—in just 16 days! Don’t miss June’s top picks.Unlock full list

FOREX-Dollar bounces back for now as safe haven plays ebb after yuan move

Published 13/01/2016, 11:24 am
© Reuters.  FOREX-Dollar bounces back for now as safe haven plays ebb after yuan move
EUR/USD
-
USD/JPY
-
USD/CAD
-
DX
-
DXY
-

* Dollar stabilises as risk aversion ease for now

* Traders not sure worst is over for China market chaos

* British pound clear loser after weak UK data

By Hideyuki Sano

TOKYO, Jan 13 (Reuters) - The dollar steadied on Wednesday as the rush to safe haven currencies such as the yen and the euro halted temporarily after Chinese authorities intervened heavily to stem the yuan's fall.

U.S. stock prices also managed to eke out gains for second day, helping to easing investor anxiety on the global economy, though gloom is still all over the news with oil prices hitting a 12-year low.

Traders are also not sure if the yuan and Chinese share markets are beginning to bottom out soon after their wild swings so far this year had many investors worried the Chinese economy may be losing momentum - beyond Beijing's control.

The dollar index edged up to 99.023 .DXY =USD from this week's low of 98.252 set on Monday.

Against the yen, the dollar fetched 117.80 yen JPY= , extending its rebound from a 4 1/2-month low of 116.70 yen touched on Monday.

The euro also ease, to $1.0845 EUR=EBS , from Monday's high of $1.0970. Both currencies tend to gain at times of market stress because the countries behind them are international creditors.

"Chinese authorities have overpowered markets for now. But as soon as they stop doing so, I suspect markets will start trying to test their resolve," said Masatoshi Omata, senior client manager of market trading at Resona Bank.

"If the dollar/yen rises further, I would like to sell it into the rally," he said.

The yuan rose on Tuesday as China stepped up efforts to stabilise the currency, intervening heavily in the offshore market are now looking to the yuan fixing by the People's Bank of China due around 0115 GMT. Chinese trade data due later in the day could also rattle investors if it shows fresh signs of weak demand. ECONCN

Among major currencies the British pound was broadly weak after data showed UK industrial output suffered its sharpest fall since 2013. pound fell to as low as $1.4352, its lowest level since June 2010, and last stood at $1.4440.

Against the yen, it fell to 169.39 yen GBPJPY=R , its lowest since October 2014. Against the euro, it stood at 75.13 pence per euro EURGBP=D4 , near Monday's 11-month low of 75.50.

The Canadian dollar hit a 12 1/2-year low of C$1.4316 per U.S. dollar CAD=D4 on Tuesday as oil prices fell below $30 for the first time in 12 years. O/R

In Asia, the Canadian unit last stood at C$1.4255.

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.