US$ weak, but keeps two-year high against yuan

Tokyo

THE US dollar slipped on Tuesday following mixed US data, but it was sitting near a two-year high against China's yuan after Beijing cut interest rates at the weekend for the second time in three months. In Tokyo, the US dollar weakened to 119.58 yen, down from 120.17 yen in New York, while the euro rose to US$1.1196 from US$1.1182. The greenback was also at 6.2737 yuan, against 6.2850 in US trade, levels not seen since October 2012, and well up from 6.2668 on Friday before the rate cut.

On Saturday the People's Bank of China cut rates by 25 basis points, pointing to "historically low inflation", in its latest bid to kick-start the world's number two economy, which last year grew at its slowest pace in nearly a quarter of a century. China keeps a tight grip on the yuan allowing it to move up or down 2 per cent daily on either side of a mid-point set under the supervision of the central bank.