Dol­lar jumps af­ter China de­val­ues cur­rency again

The Pak Banker - - INTERNATIONAL BUSINESS/SPORTS -

The dol­lar rose against a range of Asi­aPa­cific cur­ren­cies on Wed­nes­day af­ter China cut the value of the yuan against the green­back for a sec­ond con­sec­u­tive day.

The dol­lar added to the pre­vi­ous day s gains against the In­done­sian ru­piah, In­dian rupee and South Korean won, while it dipped to 124.81 yen in late trade in Tokyo af­ter ear­lier jump­ing past its New York price of 125.12 yen. The US unit also strength­ened against the Aus­tralian dol­lar, which is of­ten seen as a proxy for China s yuan, with the Aussie at 72.62 US cents, down from 73.47 cents on Tues­day. The Chi­nese yuan fetched 19.47 yen, against 19.75 yen.

The daily fix that sets the value of the Chi­nese cur­rency against the green­back was low­ered by 1.62 per­cent to 6.3306 yuan, from 6.2298 on Tues­day, the Peo­ple s Bank of China said in a state­ment on its web­site. The move, a day af­ter the unit was de­val­ued by nearly two per­cent, was widely viewed as a way to help boost ex­ports as growth slows in the word s sec­ond-largest econ­omy.

"The gov­ern­ment is fo­cused on do­mes­tic is­sues rather than global im­pli­ca­tions at the mo­ment, em­ploy­ing all the pos­si­ble means to sta­bilise the econ­omy," Ron­ald Wan, chief ex­ec­u­tive at Part­ners Cap­i­tal In­ter­na­tional in Hong Kong, told Bloomberg News.

Tues­day s de­val­u­a­tion -- the big­gest since 2005 when China un­pegged the yuan, also known as the ren­minbi (RMB) from the dol­lar -- raised wor­ries over the health of the world s sec­ond-largest econ­omy.

Observers warned the ac­tion cast into doubt when the US Fed­eral Re­serve will raise in­ter­est rates, ex­pected as early as next month, and risked set­ting off a cur­rency war where coun­tries com­pete to de­value their units. In other trad­ing, the euro firmed af­ter Greece reached a tech­ni­cal deal on a multi­bil­lion-dol­lar bailout with its in­ter­na­tional cred­i­tors fol­low­ing marathon talks. The 19na­tion cur­rency fetched $1.1079 and 138.31 yen, up from $1.1042 and 138.15 yen in US trade. In other trad­ing, the dol­lar rose to Sg$1.4135 from Sg$1.3999 on Tues­day, to Tw$32.50 from Tw$32.11, to 64.77 In­dian ru­pees from 64.16 ru­pees, to 13,825 In­done­sian ru­piah from 13,591 ru­piah, and to 35.55 Thai baht from 35.35 baht. The dol­lar also gained to 46.33 Philip­pine pe­sos from 45.95 pe­sos, and to 1,189.75 South Korean won from 1,178.94 won.

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