Chinese Yuan Retreated From 11-Month Low Against US Dollar

Forex News

Major currencies slightly strengthened today, while the Chinese yuan retreated from 11-month lows, after the China’s authorities tried to appease financial markets that were appalled by fears about trade wars. The yuan fell in June and lost more than 3% against the US dollar.

Yesterday, the central bank of China tried to calm the markets a bit after the fall of the yuan to 11-month lows. In a statement published on the website of the People's Bank of China, Governor Yi Gang said that the central bank closely follows the fluctuations of the foreign exchange market and will strive to keep the yuan at a stable and reasonable level. Cross-border capital flows were controlled, Yi said.

The Australian dollar rose on positive economic data from Australia and China. Australia's trade surplus shrunk to AUD 827 million in May from the April surplus of AUD 977 million. The value of exports increased by 4% in May, while imports rose by 3%. Retail sales in Australia rose by 0.4% in May and exceeded expectations of an increase of 0.3% after rising 0.5% in April (initially 0.4%).

The service sector in China continued to expand in June at a faster pace. The latest poll of Caixin showed, that the index of business activity of the service sector rose to 53.9 in June from 52.9 in May. Economists had expected a decline to 52.7.