Risk-sensitive currencies perked up by Evergrande, dollar anchored before Fed

Wednesday,   22-Sep-2021   03:18 PM (IST)

Risk-sensitive currencies such as the Australian dollar and Chinese yuan jumped and the safe-haven yen eased slightly on Wednesday after Chinese property giant Evergrande said it would make an upcoming yuan bond coupon payment, allaying immediate fears of a default. Some of the excitement fizzled, however, after traders realised it was still not known whether the developer would be able to pay the coupon on its offshore dollar bonds, due on Thursday. The Australian dollar rose as much as 0.49% to $0.7268 before giving up part of the gains to trade at $0.7247, up 0.2% on the day. The yen weakened about 0.2% to 109.43 to the dollar, showing little reaction to the Bank of Japan’s decision to keep policy on hold. Investors are still nervous about the fate of Evergrande, which missed interest payments due on Monday to at least two of its largest bank creditors, Bloomberg reported. The dollar index stood at 93.226 in early London trade, staying not far off Monday’s one-month high of 93.455. The euro hardly budged at $1.1725, having stabilised at a one-month low of $1.1700 on Monday. Earlier, the common currency dropped to a seven-month low of 127.93 yen, as the safe-haven Japanese currency was supported by the cautious mood. The Chinese yuan was fairly stable, firming slightly to 6.4748 per dollar in offshore trade, edging back from one-month low of 6.4878 set on Monday.