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Forex News: Yen Firms While Yuan & Aussie Dips As Trade War Sharpen

May 13, 2019 | Monday

Forex

   

Tokyo -- On Monday's session, safe-haven yen mildly firmed while the Chinese yuan and Australian dollar drops. Movements mostly led by the recent intensification in the trade war between the United States and China.

The world's biggest economies appear to be at a deadlock on trade negotiations on Sunday while Washington demands a promise of concrete changes on Chinese law as Beijing said it could not take a "bitter fruit" harming its interests.

Trade escalated late last week as the United States raise its tariff on Chinese goods worth more than $200 billion. China immediately said it measures and plan for a way to retaliate yet not revealing its details.

According to Masafumi Yamamoto, Tokyo Mizuho Securities chief forex strategist, the existing conflict among the two of the biggest economies around the globe is "intensifying, and the yen is gaining." On the contrary, the Australian dollar and the Chinese yuan slipping during Monday's trade session.

Yamamoto further explained the "overall reaction" in the currencies are "limited." But there are factors "support hopes for an eventual settlement." That includes a possible G20 meeting for both of the countries presidents.

On Sunday, White House economic adviser Larry Kudlow said the U.S. President Donald Trump and Chinese President Xi Jinping possibly meet during the G20 summit to occur in Japan by the end of June to discuss trade.

The yuan did slip to a four-month low in the onshore and offshore markets. It went down roughly 0.5 percent to 6.8533 a dollar within its onshore trade, yuan's lowest since January 8.

Meanwhile, the dollar went down by 0.15 percent to 109.790 yen. Close to a three-month low of 109.470 during late last week.

The Australian Dollar also down by 0.3 percent to $0.6976, and if the currency drops lower than $0.6960, it may be burdened by a dovish shift by the Reserve Bank of Australia, its lowest since early January.

   

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