During the conference in Hague, German Chancellor Angela Merkel said that the EU would find a backstop solution by October 31 (Brexit deadline).
Yuan reaches four-week maximum
On Monday, China's Yuan concluded the afternoon trade at a 4-week maximum versus the evergreen buck right after the major bank revived a so-called "counter-cyclical factor" in its daily fixing for the purpose of backing the national currency, stopping a record 10-week losing marathon, which rattled global markets and also irritated the US government.
The given announcement was perceived as the latest sign from China’s key bank that it’s not comfortable with further depreciation in the national currency that could provoke capital outflows from the decelerating economy.
Friday’s move showed up after the latest Sino-US negotiations aimed at tackling the trade conflict ended with little progress, with tougher American measures anticipated to kick in next month, which could apply more pressure on China’s currency.
The previous week US leader had accused the Asian trading partner of manipulating its Yuan for the purpose of cushioning the blow from American duties on China’s imports.
By the way, Monday's domestic closing price appeared to be the strongest since August 1. Additionally, spot Yuan started onshore trade at 6.8080 per greenback and concluded the domestic session at 6.8171, which is 19 pips higher than the previous night session close.
China’s major financial institution told that it was actually adjusting how the national currency’s official midpoint was calculated with the aim of keep it more stable in the face of a strengthening greenback as well as trade clashes.
With little sign of compromise in the trade negotiations, the vast majority of market experts had foreseen it was just a matter of time before China’s currency tried the closely watched as well as psychologically crucial support level of 7 against the evergreen buck.
Some analysts pointed out that the major bank’s move 100% proves their opinion that Yuan devaluation can’t be regarded as a weapon of the trade conflict.
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