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Forex - Dollar Under Pressure as Yuan Stabilizes, Euro Rallies

Published 2018-08-07, 01:31 p/m
© Reuters. The dollar traded lower against its rivals on Tuesday.
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Investing.com - The dollar fell against its rivals Tuesday, pressured by a rise in the Chinese Yuan as the People's Bank of China reportedly made a fresh attempt to steady the currency.

The U.S. dollar index, which measures the greenback against a trade-weighted basket of six major currencies, rose by 0.22% to 94.99.

The People's Bank of China, PBoC, urged some lenders to prevent any “herd behavior” in the currency market, Bloomberg reported, citing people familiar with the matter.

Some said the request from China's central bank was an attempt at curbing large banks from initiating the same positions as clients, or engaging in "herd behavior," amid a recent wave of bets against the yuan.

The move helped stabilized the offshore yuan and arrived just days after the PBoC on Friday raised the cost of shorting the currency.

A falling yuan runs the risk of large investment outflows from the China at a time of heightened concerns that President Donald Trump could up the trade-war ante with harsher trade penalties, stifling China's economy.

USD/CHN fell 0.56% to 6.8272.

U.S. economic data showing U.S. job openings undershot economists' estimates did little to help the greenback's attempt at paring losses.

The U.S. Labor Department's latest Job Openings and Labor Turnover Survey (JOLTS) report, a measure of labor demand, showed job openings in June came in at 6.66 million, missing expectations of 6.74 million.

Elsewhere, a stronger euro also weighed on the dollar, despite a steeper-than-expected decline in German industrial production.

EUR/USD rose 0.34% to $1.1592, while USD/CAD rose 0.22% to C$1.3031.

GBP/USD rose 0.06% to $1.2951, but remained at 11-month lows as fears of a no-deal Brexit offset upbeat U.K. house price data.

USD/JPY fell 0.14% to Y111.25, while USD/CHF fell 0.22% to 0.9951.

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