Yen Rises Amid Trade Concerns

The safe-haven Yen gained on Monday in Asia amid concerns over the Sino-US trade war.

Donald Trump said he was not ready to strike a deal with China and even discussed scheduled trade talks in September.

Meanwhile, the Chinese yuan remained in the spotlight after the People’s Bank of China (PBOC) settled on Monday the official mid-point reference at 7.0211 per dollar, which was stronger than analysts expected, but was still the third consecutive session. weaker than the main 7- level yuan-for-dollar.

White House trade adviser Peter Navarro warned that Washington would respond with force if China continues to weaken its currency to counter the effects of tariffs imposed by the US. currency after Beijing allowed the yuan to fall 7 percent for the first time since 2008.

The PBOC later denied that it was deliberately devaluing the Chinese currency.

China’s movements “aroused fears of a competitive devaluation policy, putting pressure on other Asian currencies,” analysts at risk advisory Eurasia Group wrote in a note quoted by CNBC.

The article noted that China is unlikely to allow any further depreciation of the Chinese currency as “significant depreciation would boost capital inflows and create unilateral market bets for further depreciation, as seen in 2015 and 2016. ”

“The bank will also be careful not to allow (the yuan) to depreciate on a sustained basis against a wider basket of currencies.” China would like to keep its depreciating pace against the gradual dollar, analysts added.

The AUD / USD pair and the NZD / USD pair were both largely unchanged at 0.6788 and 0.6470, respectively.forex.com

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