Dollar jumps after China devalues currency again
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.