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Yuan hits 16-month highs after China data; dollar falls

Tuesday,   15-Sep-2020   02:39 PM (IST)

The yuan jumped to its highest in 16 months versus the dollar on Tuesday after Chinese data pointed to an economic recovery after coronavirus-linked shutdowns, while the dollar dipped as risk appetite improved. China’s industrial output accelerated and retail sales grew for the first time this year, beating analysts’ forecasts. The yuan surged in both offshore and onshore trading. The offshore yuan hit a 16-month high of 6.7725 versus the U.S. dollar before easing slightly. The U.S. dollar slipped, although it recovered some of its overnight losses in early London trade leaving the dollar index =USD 0.1 percent lower on the day at 92.946 by 0718 GMT. U.S. industrial production data is due at 1315 GMT, while the market is looking ahead to the Federal Reserve’s two-day policy meeting starting on Wednesday. Riskier currencies gained, with sentiment also boosted by hopes for a COVID-19 vaccine. British drugmaker AstraZeneca restarted its vaccine trial in Britain on Saturday but it remains on hold in the United States. The Australian dollar rose after the country's central bank meeting minutes showed no signs of a further cut to record-low interest rates. It was at 0.7323, up 0.5% on the day. Australia recorded its first day without a COVID-19 death in two months. The New Zealand dollar was up 0.3% versus the U.S. dollar, while the Canadian dollar rose around 0.2%. The Swedish crown was up around 0.1% at 8.754 while the Norwegian crown fell around 0.3%, taking a hit as oil prices extended their fall. The euro was up 0.2% versus the dollar at $1.1891. Germany's ZEW economic sentiment survey is due at 0900 GMT. The pound showed little reaction to the UK government winning an initial vote on its controversial Brexit bill.