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SYDNEY (Reuters) – The dollar remained on the defensive against the yen on Monday, as the trade dispute between China and the United States seemed unresolved on the horizon, while vacations in Japan and Japan Singapore reduced trade.
Confusion lingers after the US president said on Friday he was not ready to reach an agreement with China and even questioned a series of trade talks in September.
In recent days, Goldman Sachs has lowered its economic growth forecast in the US, warning that a trade deal would be unlikely before a presidential election in 2020 and a growing recession risk.
On Monday, the dollar fell slightly to 7.0925 yuan in overseas transactions after the Chinese central bank set the daily rate of the yuan higher than market expectations.
This has dispelled some fears that Beijing is using its currency as a weapon in its trade war with the United States.
A week ago, China had allowed the currency to fall below 7 yuan per dollar for the first time since 2008, which was seen by some as an attempt to counter US tariffs. The change put pressure on emerging market currencies across Asia and supported the yen.
All eyes will be on Chinese data on retail sales and industrial production for July, to be released Wednesday, to measure the impact of the long-standing dispute with the United States on domestic activity .
The dollar fell against the yen to 105.40, remaining close to the seven-month low of 105.25 hit Friday. The euro also fell to 118.16 yen and close to its lowest level since April 2017.
Similarly, the pound has reached levels never seen since 2016 at 126.69 yen after falling more than eight yen in just over two weeks.
The latest pound sterling is traded at $ 1.2020 and is seeking support at $ 1.1979, its lowest level since January 2017.
The euro is slightly appreciated against the dollar, at $ 1.207.
(Reuters)
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