Dollar Falls As China, Mexico Move To Boost Currencies
Muhammad Rameez 4 years ago Fri 06th January 2017 | 11:55 AM
NEW YORK, Jan 6, (UrduPoint / Pakistan Point News - 06th Jan, 2017 ) - The Dollar retreated Thursday against other leading currencies after Chinese and Mexican officials took steps to strengthen their currencies.
Foreign exchange markets were in focus on a day of drift for global stocks, with major indices in New York, London, Paris and Frankfurt ending little changed. The moves by China and Mexico come ahead of the January 20 inauguration of President-elect Donald Trump, who has accused both countries of taking advantage of the United States on trade.
The offshore Yuan racked up two-day gains of 1.8 percent, the biggest on record, Bloomberg reported, as China's State Administration of Foreign Exchange moved to curb massive capital flight in response to a sharp drop in the yuan against the dollar.
Individuals wishing to convert yuan to foreign currencies will now will have to provide more detailed information to their banks, the Chinese agency said. The Mexican peso rallied after the country's central bank sold an undisclosed number of US Dollars in its first such intervention since Trump won the US presidential election on November 8.
The Mexican peso immediately rose 0.9 percent against the dollar, but later gave back most of the gains. "They are motivated by the strength of the dollar," BK Asset Management managing partner Kathy Lien said of the Chinese and Mexico actions.
The dollar also fell sharply against the euro and the yen. But Lien said the weakness in the dollar likely stemmed in part from uncertainty about Friday's US government jobs report after some disappointing US data in recent days, including from private payrolls firm ADP showing weaker-than-expected hiring.
"They're taking these moves in a period when there seems to be a little bit more uncertainty about the dollar," Lien said. The weakness in the dollar came after Wednesday's Federal Reserve minutes showed monetary policymakers were weighing the uncertain impact of Trump's expected fiscal stimulus policies, and the possibility they might have to raise rates more quickly.
"The onus is now on the dollar bulls to prove that further advances in the greenback are warranted." - Trump targets Toyota - ======================== Among individual companies, most US retailers tumbled following disappointing holiday sales from department stores Macy's and Kohl's.
An exception was Amazon, which surged 3.1 percent as the online retailer's Alexa voice-controlled device emerged as a major presence at the giant Consumer Electronics Show in Las Vegas, as several companies showcased new products that work with the artificial intelligence application.
US shares of Toyota lost 0.6 percent after the Japanese automaker became the latest company to be the target of threats by Trump over any cars exported from Mexico to the United States. Toyota said its US production would not fall as a result of a new plant under construction in Mexico.
Meanwhile, oil prices finished with modest gains following reports Saudi Arabia was complying fully with production cuts agreed with OPEC. - Key figures around 2200 GMT - =============================== New York - Dow: DOWN 0.2 percent at 19,899.29 (close) New York - S&P 500: 0.1 percent at 2,269.00 (close) New York - Nasdaq: UP 0.2 percent at 5,487.94 (close) London - FTSE 100: UP 0.1 percent at 7,195.31 points (close) Frankfurt - DAX 30: UP less than 0.1 percent at 11,584.94 (close) Paris - CAC 40: UP less than 0.1 percent at 4,900.64 (close) EURO STOXX 50: DOWN 0.1 percent at 3,313.02 Tokyo - Nikkei 225: DOWN 0.4 percent at 19,520.69 (close) Hong Kong - Hang Seng: UP 1.5 percent at 22,456.69 (close) Shanghai - Composite: UP 0.2 percent at 3,165.41 (close) Euro/dollar: UP at $1.0609 from $1.0493 Wednesday Pound/dollar: UP at $1.2421 from $1.2323 Dollar/yen: DOWN at 115.30 Yen from 117.27 Oil - West Texas Intermediate: UP 50 cents at $53.76 per barrel Oil - Brent North Sea: UP 43 cents at $56.89 per barrel