By Peter Nurse
The chinese yuan has benefited from your strongest stock markets of the country on Tuesday, although worries concerning the enlargement of the outbreak of coronavirus have limited gains.
At 10: 50am, the USD/CNY was trading at 6,9935, down by 0.4%, returning below the level of 7.0 after you have crossed that barrier on Monday for the first time this year.
The country’s central bank has attempted to mitigate the economic damage caused by the coronavirus by reducing interest rates and injecting 1.2 trillion yuan of liquidity on the markets.
Many expect more measures to come.
“The chinese authorities have provided important support to the financial markets. There is a certain level of assurance that the rout could not go further than necessary,” said Christy Tan, head of markets strategy for Asia at National Australia Bank, to Singapore.
However, the number of deaths from coronavirus in China has continued to rise, reaching 425 Monday, more than 20 000 cases, with a mortality rate of just 2%.
The US Dollar Index, which tracks the greenback against a basket of other currencies, rose 0.2% to 97,767, helped by data sense manufacturing stronger than expected on Monday.
“The ISM manufacturing index is back in the territory of positive growth. The trade agreement of the phase 1 between the United States and China has lifted much of the gloom that hovers over the sector, companies are responding positively”, said ING, in a research note.
The book was low earlier on Tuesday as the Prime minister Boris Johnson and the chief negotiator of the EU Michel Barnier have presented contrasting visions for relations between the two groups after the Brexit.
There is continuing concern that the United Kingdom did not put an end to the transition period at the end of this year without a trade agreement.
At 10: 50 am GBP/USD was trading at 1,3018, an increase of 0.2%, after falling near lows of seven weeks at 1,2941 earlier.
The australian dollar rose after the Reserve Bank of Australia decided to maintain the official rate of cash at 0.75%. The decision was largely in line with expectations, but analysts anticipate a new rate cut in the near future.
At 10: 50am, the AUD/USD pair is gaining 0.3% to 0,6710.