In the offshore market, the Chinese yuan was the biggest mover. Thus, against the United States dollar, it fell to a six-week low of 7.1555. It was flat at 7.1380. Nevertheless, it fell again. The next levels to watch would be the early-September low of 7.1975 and the mid-March low of 7.1651.
Moreover, analysts debate over how the United States can attack China again. It might happen with canceling the payments on the United States Treasurys that China owns or even more trade tariffs. All in all, all analysts agreed that the dollar/yuan pair cross would see higher volatility.
Lee Hardman is a forex strategist at MUFG. He said that re-escalation in US-China trade tensions has the potential to bring an end to the relative stability in the USD/CNY pair.
Nonetheless, for May, the moves extended a dour start. It began with Friday’s bleak United States data. Also, it started with the threat of a new trade war between the world’s two biggest economies.
The most significant move was in the yuan versus the United States dollar. Scandi currencies and the euro fell against the greenback.
Nevertheless, there are fears that last year’s China-United Stated dispute will restart. Against most major currencies, the US dollar surged on Monday. Nonetheless, this time it was because of the fears reacting to the novel coronavirus.
Moreover, the United States President Donald Trump and Secretary of State Mike Pompeo pinned the blame for a pandemic on China. Most of the world is thinking that the new coronavirus outbreak happened in China.
The latest salvo came from Pompeo on Sunday. Thus, he said that there is a considerable amount of evidence that the virus emerged from the central city of China, Wuhan.
Simon Harvey is a currency analyst at broker Monex Europe. He said that the risk-averse was dominating yesterday’s morning session.
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