- CNY strengthens against USD
- Most other Asian currencies follow suit
- Tomorrow’s tariff deadline continues to weigh on markets
Most Asian currencies strengthened against the American dollar yesterday. The leader of the pack was the Chinese Yuan as that country attempted to set markets at ease by promising to keep the currency stable.
Both the CNY and the CNH strengthened against the USD, by 0.5% and 0.6% respectively. Other currencies that improved against the USD included MYR (+0.12%), SGD (+0.16%), THB (+0.27%), TWD (+0.3%), IDR (+0.31%) and KRW (+0.37%).
The HKD, INR and PHP showed little movement.
The People’s Bank of China tried to calm markets this week by promising not to use the Yuan as a weapon. This helped to stabilize the Yuan, which has come under pressure in recent weeks.
The USD/CNH rate slipped even further yesterday, temporarily dropping below 6.6200. The onshore Yuan lifted above the 11-month lows it reached on Tuesday.
The USD/SGD rate moved lower after reaching a 1-year low on Tuesday, with the stronger Yuan offering some sort of support to the Singapore currency. This rate dropped to 1.3603 – its lowest level in a week – but recovered somewhat afterward.
The onshore USD/IDR rate gapped yesterday and opened at 14350 after it closed at 14380. The stronger Yuan also played a role here, strengthening currencies from emerging Asian nations.
The USD/INR onshore rate also gapped lower and opened at 68.5200 yesterday, compared to its last closing rate of 68.5750. It dropped to 68.50000 in the first few hours and was trading at 68.4600 at the time of this writing. China’s promise to keep the Yuan stable helped to boost the value of the INR. Whether this will become a more permanent feature of the Asian currency markets remains to be seen.
The next important event on the calendar comes tomorrow, when the US plans to slap massive new tariffs on Chinese imports.