Tuesday, 16 July 2024

Dollar near 16-week low, yuan heads for largest weekly gain ‎since 2005‎


The dollar settled near its lowest level in 16 weeks against a basket of major currencies today, Friday, before key data related to the labor market in the United States, while the yuan is heading to record the largest weekly gain since China revalued its currency in 2005.

According to “Reuters”, the dollar index, which measures the performance of the US currency against six other major currencies, including the yen and the euro, fell 0.1 percent to 104.55, after earlier reaching its lowest level since June 29 at 104.36.

The index fell by more than 5% last month, amid expectations that the Federal Reserve (the US central bank) will start slowing the pace of interest rate hikes during its December meeting.

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Investors are now focusing on the US non-farm payrolls data, which is scheduled to be published on Friday, in search of indications of how raising interest rates will affect the labor market.

Meanwhile, the Chinese yuan rose 0.4 percent against the dollar, to 7.0294.

The yuan is heading for the largest weekly gain since China revalued the currency in 2005, according to Refinitiv data, supported by expectations that China will abandon the zero Covid policy, as well as anticipation of the US central bank slowing the pace of rate cuts.

The dollar fell 1 percent to 133.98 yen, its lowest level since August 16.

The euro saw little change and reached $1.0527, after rising 1.1 percent on Thursday.

The British pound fell 0.1% to $1.2260. And it recorded a rise of 1.7 percent on Thursday, reaching its highest level in five months at $1.2311.