US dollar flat, but on track for eight straight weeks of gains; yuan sinks
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THE dollar was little changed on Friday (Sep 8), consolidating gains amassed during the week on better-than-expected US economic data, even as the currency’s underlying strong trend remained amid stable consumer and labour markets, which have kept the prospect of another rate increase on the table this year.
Despite Friday’s pullback, the dollar index was headed for eight straight weeks of gains, the longest such streak since 2014.
China’s onshore yuan, on the other hand, ended its domestic session at its weakest since 2007, as it battles capital outflow pressures and a widening yield gap with major economies.
The euro, the largest component in the dollar index, was on track for eight straight weeks of losses and down 0.7 per cent on the week.
It was last flat on the day at US$1.0699, having fallen to a three-month low on Thursday.
Sterling moved away from Thursday’s three-month low and last bought at US$1.2459, down 0.1 per cent.
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The Canadian dollar firmed against the greenback after Canada created 39,900 jobs last month, compared with a median forecast for a gain of 15,000. The unemployment rate remained at 5.5 per cent. The US dollar was last down 0.3 per cent versus the Canadian currency at C$1.3642.
The onshore Chinese yuan touched its weakest level against the dollar since December 2007 at 7.3510, while its offshore counterpart sank to a 10-month low of 7.3665 per dollar.
China’s currency has depreciated steadily since February as the faltering post-pandemic economic recovery and widening yield gap with other economies, particularly the United States, affected capital flows and trade. The yuan’s rapid decline has prompted authorities to step in and slow the pace of its depreciation.
The struggling yen was also in focus. The Japanese unit was last down 0.3 per cent at 147.6 per dollar and on the weaker side of the key 145-level that prompted Tokyo’s intervention last year. Japanese Finance Minister Shunichi Suzuki said on Friday that rapid currency moves were undesirable and the authorities wouldn’t rule out any options against excessive swings, in a fresh warning to investors trying to sell the yen. REUTERS
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