USD/JPY steadier after China rate cut

USD/JPY was up 0.2 percent at 119.12 but off the high of 120.40 scaled overnight. It had managed to pull away from a seven-month low of 116.15, after China’s central bank cut interest rates for the second time in two months late on Tuesday.

The U.S. dollar traded above 125 yen less than two weeks ago, before wide-spread risk aversion prompted investors to buy back the yen and euro – currencies used to fund investments into riskier assets.

EUR/USD climbed 0.1 percent to 1.1531 after a 0.9 percent overnight loss pushed it away from a seven-month peak of 1.1715. The euro is seen continuing to gain from risk aversion at least in the short term.

AUD/USD was flat at 0.7128 and still within reach of a 6-1/2-year low of 0.7044 struck on Monday. Growing fears that China’s economy could have a hard landing prompted markets to substantially narrow the odds of further easing by the Reserve Bank of Australia. The aussie is usually used as a China proxy.

NZD/USD was firmer at $0.6498 and keeping its distance from Monday’s six-year low of 0.6200. NZD/JPY found its footing and crept up 0.3 percent to 77.10 yen , stabilising after tumbling to 72.75 yen earlier in the week, its weakest since early 2013.

The Chinese yuan promptly weakened after PBOC’s extensive easing. Spot yuan traded at 6.4234 to the dollar from Tuesday’s close of 6.4124.

The post USD/JPY steadier after China rate cut appeared first on Forex Circles.

Source:: USD/JPY steadier after China rate cut

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