China central banker says currency slide under observation

Major Chinese banks ditching US dollar to prop up domestic currency

China's yuan rebounded for a second day on Wednesday as the currency took a breather from its sharp depreciation in recent weeks, although bearish sentiment lingered as the U.S. prepares to implement tariffs on US$34 billion of Chinese imports on July 6. It rose further, by 0.41 per cent, to 6.6384 on Wednesday morning.

Four traders told Reuters that major state-owned banks were seen swapping yuan for dollars in the forwards market and immediately selling some of them into spot market, which helped support the Chinese currency.

"The market remains supported by a production outage in Libya and the overhang from recent USA. data which suggest U.S. supplies are running very tight", said Stephen Innes, head of Asia-Pacific trade at OANDA.

The central bank has closely watched recent fluctuations, Yi said, adding that China's economic fundamentals were sound and financial risks were largely under control. The yen gained 0.2 percent versus the dollar to 110.39, supported by its safe haven status.

The yuan fell to 6.7204 per USA dollar, its weakest since last Aug 7, and the first time it has dropped below 6.7 since Aug 9, before crossing back and forth over the line.

While the focus this week is mainly on the hundreds of billions worth of goods targeted by China-US tariffs, Trump has also taken aim at the European Union and Canada, which have both announced retaliatory measures, adding to global trade war warnings. At 0542 GMT it was trading at 6.7010.

"I detected increasing alarm over trade tensions and a lot of nervousness about a full blown trade war, which comes at a bad time for China where the economy is undergoing a downdraft at the same time the United States is seeing a sharp upturn", Aninda Mitra, Singapore-based senior sovereign analyst at BNY Mellon Investment Management, who visited Shanghai last week, said in an emailed note to media.

Thai soccer team trapped in cave gets crash course in scuba diving
However, that was before rain lashed the area yesterday afternoon. "I'm not sure they can eat as they have not eaten for a while". They were on a ledge about 440 yards from an underground chamber called Pattaya Beach, where they moved to avoid rising water.

RBA Governor Philip Lowe said "one uncertainty regarding the global outlook stems from the direction of worldwide trade policy in the United States", cautioning that the recent U.S.

Other Asian currencies weakened, especially those such as the Indonesian rupiah that are doubly exposed - to trade and oil prices approaching $80 a barrel.

The peso firmed 2.6 percent overnight, by far the biggest gainer among Latin American currencies, as positive sentiment on Mexico helped magnify an emerging markets rally.

The mood was more cheerful in Europe where a pan-European equity index rose half a percent .STOXX , the euro firmed marginally and bond yields rose after German Chancellor Angela Merkel struck the deal with her Bavarian conservative coalition partners.

The Chinese yuan has been sinking to fresh lows versus the dollar.

The market was caught in the well oversold territory after the PBoC, for the time being, stemmed the relentless United States dollar rally after avowing to keep the RMB exchange rate stable.

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