The offshore yuan managed to come off an all-time low on Tuesday after Beijing appeared to take steps to prevent the currency from sliding further, following a sharp drop that prompted the U.S. government to label China a currency manipulator, Reuters reports.
The yen slumped against major currencies as China’s response in the trade war forced speculators to give up short-term bets that risk aversion would push the Japanese currency higher.
Yet, highlighting the shakeout in asset markets after Monday’s rapid escalation in tensions pushed the U.S.-China trade war into uncharted territory, the dollar index .DXY against its main rivals also remained on the backfoot.
On Monday, China let the onshore yuan break through the key 7 per dollar level for the first time since the global financial crisis, sending global financial markets into a tailspin, and investors are closely watching to see how much more Beijing will allow it to fall.
China said early on Tuesday it was selling yuan-denominated bills in Hong Kong, in a move seen as curtailing short selling of the currency.
The yen, which usually rises during times of economic stress and market turmoil due to Japan’s status as the world’s biggest creditor, also slumped against major crosses after the latest moves from Beijing.
Read also:
