Forex – Yuan Stabilizes as PBOC Acts to Calm Markets

The Chinese yuan stabilized against the dollar on Wednesday – The Chinese yuan stabilized against the dollar on Wednesday after touching its lowest levels in around 11 months overnight. Reports that the People’s Bank of China assured markets the central bank would keep the currency stable were cited as supporting the yuan.

Yi Gang, governor of the PBOC, said in a statement on Tuesday that t  

The yuan tumbled in June and lost more than 3% against the greenback as concerns of a Sino-U.S. trade war haunted investors.

The pair was down 0.16% at 6.6316 by 12:15AM (04:15 GMT) on Tuesday, although traders are likely to remain on edge ahead of the July 6 deadline when the U.S. tariffs on $34 billion in Chinese goods are due to take effect. 

Many investors fear that the proposed plan to impose tariffs on more Chinese goods would further dampen global growth. Beijing has earlier said that it would match with tariffs on U.S. products, raising the risk of a full-blown trade war.

“It looks like national team buying,” said Steven Leung, Uob Kay Hian (Hong Kong) Ltd. executive director in Hong Kong. “Also, the declines were too much, so there should be some bargain hunting.”

The “national team”, as China’s state funds are called, have previously stepped in to stabilize the markets and lift sentiment during routs.

Concerns that a trade dispute with the U.S. would damage Chinese economy have erased $2 trillion from the value of Chinese stocks since a January peak.

Meanwhile, the , which tracks the greenback against a basket of six major currencies, stood at 94.28 on Wednesday, down 0.04%. 

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.