Home Business News Strong economic data boosts USD, China supports CNY

Strong economic data boosts USD, China supports CNY

15th Sep 23 3:57 pm

Traders moved to profit-taking after the US Dollar surged yesterday when it was heading toward its March peak.

The USD climbed yesterday in reaction to the better-than-expected US economic data and the European Central Bank’s interest rate decision and could continue to strengthen against the euro.

However, the USD was in a less favorable position against the Chinese yuan as China continues to put new measures in place to boost its economy and halt the decline of its currency. The Chinese currency could see more gains if Chinese banks continue to support it.

China has also instructed some brokerage companies to reduce their proprietary foreign exchange trading in this regard.

In addition, the yuan was boosted by better-than-expected growth in industrial production and retail sales, further bolstering traders’ confidence.

Meanwhile, the Japanese yen continues to decline against its US counterpart and could still find some resistance near this year’s high as risks of an intervention from the Bank of Japan could remain a weight on trader’s expectations.

However, the large interest rate differential between the two could continue to play in favor of the dollar.

The Bank of Japan could maintain its dovish tone for the remainder of the year as it considers new data in order to determine whether to lift its negative interest rates.

Leave a Comment

You may also like


Sign up to our daily news alerts

[ms-form id=1]