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The dollar slid on Tuesday against the yen refuge in Asia, frightening the concern over rising US bond yields, the Sino-US trade war and political turmoil in Europe.
The yen extended gains against the greenback until a fourth consecutive session, after reaching its lowest level in 11 months, at 114.55 yen per dollar, reached last Thursday.
"The rise in US Treasury yields is causing a correction in the US stock markets, which is generally a risk-averse situation that causes the yen to strengthen," said Masafumi Yamamoto, chief monetary policy strategist at Mizuho Securities. Tokyo.
The dollar lost 0.2% to 113.04 yen on Tuesday.
Yamamoto said that although the US economy remains strong, the correction in the US stock markets and the resulting dollar / yen drop should be short-lived.
"The falling dollar / yen, generally below 113, is a good chance to buy the dollar down," he said.
Against a basket of rivals, the greenback remained steady at 95.774, close to the seven-week high of 96.127 hit last week.
Treasury yields at 10 years were the last at 3.2404% Tuesday, just after a seven-year high.
The euro traded at 1.1481 USD, representing a seven-week low of 1.1557 USD, reached in the previous session, in a climate of contention between Italy and the US. the European Union on the draft budget of Rome.
On Monday, the yield on 10-year Italian bonds rose more than 20 basis points to 3.626%, the highest level since February 2014, while the country's stock market fell to its lowest level since April 2017.
Italian Deputy Prime Minister Matteo Salvini said Monday that European Commission President Jean-Claude Juncker and Economic Commissioner Pierre Moscovici were enemies of Europe.
Faced with the Japanese currency, the euro lost 0.15% to 129.95 yen, slightly above the almost four-week low of 129.49 yen reached overnight.
The Chinese offshore yuan was slightly weaker at 6.9263 yuan to the dollar, after a drop of about 0.35% overnight.
On Sunday, the Chinese central bank decided to inject more cash into the financial system, while policymakers reinforced their support for the economy in the face of worsening prospects in the context of the Sino-US trade dispute. .
A senior US Treasury official said Monday that the United States remains concerned about the recent depreciation of the Chinese currency.
"US yields are rising, as Chinese authorities try to lower Chinese yields.This is usually a strong dollar / a weaker renminbi situation," he said. Yamamoto, from Mizuho.
"If the stimulus measures adopted by the Chinese authorities are considered positive for the Chinese economy, they will support the renminbi," he said. "But for the moment, this is not the case."
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