By: DailyForex.com
Safe haven currencies like the Japanese Yen and Swiss Franc were the recipients of investors’ collective fears after the Chinese government once again sent the Yuan lower. The greater cause, of course, is that China’s economy, the world’s second largest, is edging nearer to collapse. That is despite the efforts of Beijing, via monetary and fiscal policies that are intended to stimulate exports.
As reported at 10:52 am (GMT) in London, the USD/JPY was trading at 117.6525 Yen, down 0.71%; the EUR/JPY pair was also lower at 127.5305 Yen, a loss of 0.14%. The EUR/CHF was trading at 1.0861 Swiss francs, a loss of 0.02%.
Aussie and Kiwi Dollars Pressured
Though the Chinese government desperately wants the Chinese economy to be more reliant on consumers, much like the US economy, it is still engineering a way to prop up exports which still accounts for a large percentage of GDP. Thus the Peoples Bank of China has been instrumental in pushing the Chinese Yuan lower. As a result, commodity-linked currencies, like the Aussie and Kiwi Dollars which have a significant trading relationship with China, have been under heavy pressure. The AUD/USD was down 0.81% to trade at $0.7009 while the NZD/USD was trading just above the day’s opening price at $0.6636, a gain of 0.008%.