Tuesday, October 3, 2023

Dollar rises after solid US data; Yuan falls to 16-year low

LONDON/NEW YORK, Sept 7 (Reuters) – The dollar rose on Thursday, pushing the yen to a 10-month low and the euro and sterling to three-month lows as investors rallied on a stronger than expected economic activity based on a still robust US economy record.

* The yuan fell to a 16-year low against the dollar, weighed down by a contraction in the housing sector, weak consumption and the credit crunch in the world’s second largest economy.

* Against a basket of six major currencies, the dollar rose 0.2% to 105.03 from an earlier six-month high, a milestone also reached the previous day on the back of an unexpected rebound from the US services sector. in August.

* More data emerged on Thursday pointing to a relatively sluggish US economy.

* “This is an economic outperformance of the United States relative to the rest of the world,” said Brad Bechtel, global head of foreign exchange at Jefferies in New York. “The fundamental situation in the United States continues to be slightly better than in the rest of the world. This continues to be a huge catalyst for dollar strength.”

* Initial jobless claims fell unexpectedly to 216,000 in the week ended September 2, while a separate report showed that second-quarter labor productivity was not as strong as initially reported but remained solid.

* The yuan fell to 7.3299 units per dollar, its lowest level since December 2007, and settled at 7.3297 per dollar in the afternoon, down 0.2%.

* China has launched a raft of policies in recent months to revive a faltering economy after the post-pandemic recovery stalled, and investors are awaiting more support from Beijing to restore market confidence.

* The China-sensitive euro fell 0.3% to $1.0696 after hitting its lowest since June the previous day; the yen rose 0.4% to 147.20 units per dollar after hitting a new high since November of 147.875; and sterling fell 0.3% to $1.2470, its lowest in three months.

Nation World News Desk
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