Investing.com - The Chinese yuan inched up on Monday in Asia as China warned that yuan shorters could “suffer from a huge loss.”
The USD/CNY pair fell 0.1% to 6.8925 by 11:30 PM ET (03:30 GMT).
Guo Shuqing, head of China’s banking and insurance regulator, said in a speech that speculators "shorting the yuan will inevitably suffer from a huge loss.”
China will report its May economic performance on Friday. According to analysts, the official manufacturing PMI will likely contract as a results of the trade war with the U.S.
The USD/JPY pair gained 0.2% to 109.44 after U.S. President Donald Trump said the U.S. is making “great progress” in trade negotiations with Japan. A trade deal will not happen before the country’s elections in July, he noted.
Glen Fukushima, former deputy assistant of United States Trade Representative for Japan and China, believes the two side can reach an agreement in the next six to nine months.
The NZD/USD pair was trading near flat at 0.6552. The Reserve Bank of New Zealand will publish its financial stability report Wednesday.
The AUD/USD pair rose 0.2% to 0.6933.
The U.S. dollar index slipped 0.1% to 97.428, retreating further from two-year peaks, after weaker than expected U.S. economic data late last week added to the view that the economy is losing momentum.
Analysts now believe the Federal Reserve might consider cutting rates before the year end amid escalating trade tensions and the release of the recent weak data.
“In the current circumstances, we strongly suspect that further escalation in protectionism will lead the Fed to consider easing policy,” wrote Michael Hanson, head of global macro strategy at TD Securities. “Increases in inflation should be relatively short-lived, while the hit to growth could be more persistent.”
The GBP/USD pair rose 0.2% to 1.2737.
Markets in the U.K and the U.S. are closed on Monday for a holiday.