Yuan strengthens after dollar drops the most in over a month
Sharp decline in the greenback overnight due to the uncertainty surrounding US elections and interest rate prospects
The onshore yuan strengthened Wednesday morning after the People’s Bank of China raised the currency’s guidance rate, following a sharp decline in the US dollar overnight due to the uncertainty surrounding US elections and rate prospects.
The onshore yuan firmed 0.02 per cent to 6.7642 per US dollar by 10.15 am in Shanghai. However, the offshore yuan, which trades in Hong Kong, fell 0.02 per cent to 6.7744 per US dollar.
On Wednesday, the People’s Bank of China raised the yuan’s mid-point rate by 172 basis points to 6.7562 per US dollar.
Overnight, the ICE US dollar index, a measure of the greenback’s strength against its major currency rivals, retreated more than 0.7 per cent, the worst in more than a month.
“The markets anxiety levels have moved up a gear,” said Chris Weston, a Melbourne-based strategist for IG Group.
Money has been moving out of greenback and into safe-haven currencies like the Japanese yen and the Swiss franc, as investors were risk-averse amid concerns about US election results and the Federal Reserve rate decision, Weston said.。