Investing.com – The yen gained ground against the u.s. dollar Wednesday, and the yuan has weakened in the face of continuing concerns raised by the escalation of the trade war between the United States and China, which have kept investors in suspense.
The yuan has lost ground against the dollar in the trade offshore on Wednesday after the people’s Bank of China has fixed its mid-point official barely higher than its closing previous. The currency of China has also opened low against the dollar in the exchange onshore.
The trade conflict that lasts a long time between Washington and Beijing worsened at the end of last week when the american president Donald Trump has announced that it would impose more tariffs on the chinese products.
China responded on Monday by leaving its currency weakening beyond the psychologically important $ 7, which immediately prompted the administration to Trump a qualifier for the China manipulator monnnaie.
The escalation of the trade war has reduced to nothingness the hope of a speedy resolution of the conflict.
Trump said Tuesday that he was ready to engage in the long term, tweeting that he was ready to lend its support to american farmers by 2020 if they were to do in the face of pressure from China.
The dollar was down 0.21% to 10.20 am, at 106.25 yen. On Tuesday, the greenback climbed 105,51 yen to 107,07 in a session volatile, driven by concern over the monetary policy of China.
The yuan offshore has fallen to 7.0701 for a dollar, a level close to that of 7.1397, the lowest level since the beginning of the international trade of the currency in 2010.
The yuan onshore is open to 7,0369 for a dollar against 7.0250 to the final closing.
“The escalating trade frictions between the United States and China has deteriorated the market sentiment, which will eventually lead to lower yields of the Treasury and the yen from the top,” said Tohru Sasaki, head of research on the japanese markets at JP Morgan Securities in Tokyo.
“We still expect that the dollar will reach 7.35 a yuan by the end of the year, which will make the american administration very uncomfortable. I expect a fall in the dollar to 104-103 yen by the end of the year.”
The dollar index, which measures the greenback versus six major currencies, was little changed, at 97,44.
The feeling of risk has deteriorated further after the Reserve Bank of New Zealand has stunned traders by lowering the interest rate by 50 basis points, more than expected, to a historic low of 1.00%, highlighting the growing concern generated by the decision-makers in the global economy.
The new zealand dollar was down 1.65% to 0,6412.
During this time, the euro was slightly lower in the dollar to 1,1187.
In the euro zone, data released on Wednesday showed that German industrial output fell 1.5% in June, more than the 0.5% drop expected by economists and compared to a growth of 0.1% in the previous month.
The data add to indications that the largest economy in the euro zone contracted in the second quarter, which will weigh on the bloc as a whole.
–Reuters contributed to this report