Yen loses ground as China curbs renminbi strength
The yen lost ground to the US dollar again on Wednesday as investors adjusted to the fact that China would not be allowing the renminbi to get any stronger in the near term.
Since the revaluation of the Chinese currency last week, the People’s Bank of China has been seeing to it that renminbi does not move any more than 0.3 percent up or down from its midpoint in the previous day’s trade.
Beijing is concerned that it does not attract any more capital to an already overheating economy by making it currency too attractive to speculators.
By midday in New York, the dollar was unchanged in relation to the yen to stand at ¥112.15, while the euro gained 0.3 percent against the yen to ¥135.30. Meanwhile, the euro ended 0.2 percent higher in relation to the dollar at $1.2050.
The euro had fallen against the dollar earlier in the day as data out of the US showed that durable goods orders had gone up by 1.4 percent in June, much better than the decrease of 0.5 percent that had been expected.
However, the euro’s decline in reaction to that data spurred central banks to begin buying euros. Sterling gained 0.15 percent in relation to the dollar to $1.7444, but was down just a bit against the euro to £0.6910.
In Australia, news that inflation had grown at a slower rate than had been expected sent the Australian dollar down for the third day in succession.
Consumer prices were up 0.6 percent for the quarter, less than the expected rise of 0.8 percent. The Australian currency fell to $0.7559, a decline of 0.3 percent.
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