Euro Trims Earlier Gains as Yuan Weakens

Barbara Zigah

By: Barbara Zigah

The common currency Euro rose briefly versus the U.S. Dollar following the Chinese central bank’s signal that it would tolerate the Yuan’s appreciation. Hedge fund operators in China reacted quickly to the announcement and promptly bought the Euro, causing an immediate spike from $1.2316 to $1.2355 in intraday trading. Later, as the Yuan began to weaken, the Euro gave back some of its earlier gains, falling then to a low of $1.2284. Earlier today, the People’s Bank of China established the central parity of the U.S. Dollar/Chinese Yuan at 6.7980, down from yesterday’s 6.8275 which marked the biggest 1-day change in recent trading history, though most market players don’t believe it will occur again. Investors further suggest that the Yuan weakened on speculation that the central bank was actually been intervening to prevent a sharp rise.

The Euro may continue to slide if it cannot hold onto the boost generated by the Chinese central bank’s movements. Likewise, investors continue to worry about the Euro-zone fiscal problems. One forecaster predicts that over the next quarter the Euro may slip to $1.15. Against the Swiss Franc, the Euro fell to an all-time trough, trading at 1.3650 CHF.

Barbara Zigah

After working on Wall Street, Barb began her second career as a freelance writer at Daily Forex, where the CEO recognized fresh, untapped potential and was willing to give her a try. She’s never looked back. Since then, she’s worked steadily as a freelance writer and editor in the financial services and Forex-related industry.

Did you like what you read? Let us know what you think!

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

0 User comments

exclamation mark

Please make sure your comments are appropriate and that they do not promote services or products, political parties, campaign material or ballot propositions. Comments that contain abusive, vulgar, offensive, threatening or harassing language, or personal attacks of any kind will be deleted. Comments including inappropriate will also be removed.

Read more
Add new comment
This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.