Forex, Dollar Towards Pending Weekly Loss in US, Yuan Recovers By Reuters

Forex, Dollar Towards Pending Weekly Loss in US, Yuan Recovers By Reuters
© Reuters. US$1 and US$2 bills in a photo dated March 10, 2023. REUTERS/Dado Rovik/Illustration/File Photo/File Photo

LONDON/TOKYO (Reuters) – The dollar index is expected to turn negative on a weekly basis after six straight weeks of gains, ahead of the important US monthly payroll report in August, which is likely to set the stage for the Fed’s monetary policy. near future.

At approximately 11:05 a.m., the dollar index fell 0.02% to 103.60, bringing this week’s decline to 0.53%. On a monthly basis, August was the best performance since May, with a gain of 1.7%.

US data released so far on employment and inflation have been very disappointing and have prompted telecom companies to reduce their bets on an interest rate hike on September 20 to 12% from 18% last week.

Two-year Treasury yields, which are particularly sensitive to interest rate expectations, fell about 20 basis points this week to 4.86%, the biggest weekly decline since mid-March.

USD/JPY is weak, with a weekly decline of 0.65%.

The euro rose 0.08% to $1.0849, after declining 0.74% yesterday.

In Asia, the yuan jumped to 7.2641 per dollar in offshore trading, the highest level since August 11.

China’s central bank announced a cut in the foreign exchange reserve requirement ratio (RRR) by 200 basis points, which will drop to 4% from September 15. The Chinese currency fell in mid-August to a record low of 7.3426 against the dollar, the lowest level in the past eleven months.

(Translated by Chiara Scarcella, Editing by Alicia Beh)

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