Breaking News
Get 40% Off 0
👀 Reveal Warren Buffett's stock picks that are beating the S&P 500 by +174.3% Get 40% Off

Dollar slips and yuan soars as investors eye Biden presidency

Published Oct 08, 2020 08:34PM ET Updated Oct 08, 2020 11:05PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. FILE PHOTO: FILE PHOTO: George Washington is seen with printed medical mask on the one Dollar banknote in this illustration taken
 
EUR/USD
+0.31%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
USD/CNY
+0.13%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
CMWAY
+1.58%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
NABZY
+0.27%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
USD/CNH
+0.02%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
ILS/UAH
+0.65%
Add to/Remove from Watchlist
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

By Tom Westbrook

SINGAPORE (Reuters) - The dollar drifted toward a small weekly loss on Friday, while the Chinese yuan soared to a 17-month high, as investors wagered on a Joe Biden presidency and on more U.S. stimulus spending.

The yuan's leap, when China's markets reopened after the Mid-Autumn break, was partly a catch-up since the offshore yuan has gained against a softening dollar during the week.

But as it extended gains beyond 1%, its biggest daily jump in nearly two years, traders said it provided one of the clearest indications yet that Biden's lead in the polls is driving bets on a steadier Sino-U.S. relationship. [CNY/]

A stronger-than-expected setting of the yuan's trading band also signalled that policymakers in China don't mind its rise.

The yuan was last up 1% at 6.7218 per dollar in onshore trade and it rallied half a percent to 6.7083 per dollar offshore . The dollar eased 0.1% against a basket of currencies (=USD) and it is down 0.4% for the week.

"I think the main message is that the (People's Bank of China) is allowing further renminbi appreciation at this level," said Ken Cheung, chief Asian FX strategist at Mizuho Bank in Hong Kong. "So markets are positioning for a renminbi rally."

The prospect of a Biden administration less inclined toward tariffs and trade disputes was another boost, he added.

"Polls are showing that Biden is taking the lead... it means the risks of resuming a new trade war are getting smaller, so I think this is positive for the renminbi."

Reuters/IPSOS polling this week put Biden, a Democrat, narrowly ahead of Republican President Donald Trump in five states - Wisconsin, Pennsylvania, Michigan, Florida and Arizona - that will play critical roles in deciding the victor.

STIMULUS HOPES

A growing expectation that, whoever wins, U.S. stimulus spending will flow has also been weakening the dollar in the short term, by improving investors' mood and their willingness to buy riskier assets such as stocks and commodity currencies.

Talks have resumed between House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin over coronavirus aid plans, two days after President Donald Trump ended them, and investors reckon a Democratic administration would be eager to spend.

"The uncertainty is more around whether it will happen before the election and how big it will be," said Rodrigo Catril, senior FX strategist at National Australia Bank (OTC:NABZY) in Sydney. "Investor confidence is growing that Biden will win the presidential election by a clear margin, reducing the risk that Trump disputes the result."

The risk-sensitive Australian dollar rose 0.1% on Friday to put it a fraction higher for the week, despite analysts interpreting a Tuesday central bank statement as a signal of monetary easing to come.

The New Zealand dollar likewise recouped Thursday losses made after another dovish signal from the Reserve Bank of New Zealand and was last up 0.3% at $0.6602.

The safe-haven Japanese yen , which has been sold with the upbeat mood, was a tiny bit higher at 105.87 per dollar on Friday. It is down about 0.5% this week.

The euro (EUR=) was up 0.1% to $1.1773 and sterling crept higher to $1.2951 and has held firm this week as prospects for a Brexit deal have appeared to improve.

Elsewhere, a 10% surge in oil prices this week, on optimism about stimulus and supply disruptions owing to a storm in the Gulf of Mexico and strike in Norway, has boosted oil-linked currencies. [O/R]

The Canadian dollar is set for its best weekly rise in more than two months, adding 0.9% to C$1.3185 per dollar. The Russian rouble has also gained about 1% for the week.

Dollar slips and yuan soars as investors eye Biden presidency
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.
  • Any comment you publish, together with your investing.com profile, will be public on investing.com and may be indexed and available through third party search engines, such as Google.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (2)
John Hat
John Hat Oct 09, 2020 1:16AM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Trump is gonna win.
perplexed76 .
perplexed76 . Oct 08, 2020 11:17PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
"it means the risks of resuming a new trade war" So, "trade war with China" is not trump's idea. His idea was to bla-bla with Kim Jong Un that ended in infamous fail.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email