China dumps dollars

China dumps dollars
Published: 27 June 2018
SOME Chinese banks today sold off large amounts of dollars to devalue the yuan, further rattling investors.

The move by Chinese banks was likely at the behest of the Chinese government, analysts said, with the devaluation the latest shot fired in the ongoing trade war with the White House.

US President Donald Trump's administration is gearing up to announce mechanisms to protect US firms, particularly in the technology sector, from Chinese acquisition.

Emerging-market currencies, including the rand, continued their slide in risk-off trade, having been under strain from the prospect of reduced global economic growth as a result of rising protectionism.

"So far there have been no new negotiations between US and China, and markets are fearing that the two nations could settle into a low-grade war of attrition that will erode investor confidence and weigh on risk assets for a considerable period of time," said BK Asset Management MD Boris Schlossberg.

No major local or international data releases are scheduled for Wednesday, with analysts expecting geopolitical events to provide the local currency with most of its direction.

Government bonds were a little weaker in mid-afternoon trade, with the benchmark R186 bid at 8.92% from 8.88%.

At 3pm, the rand was at R13.7254 to the dollar from R13.5372, R15.920 to the euro from R15.7711, and R18.0540 to the pound from R17.8985. The euro was at $1.1599 from $1.1650.
- businessday
Tags: Dollars,


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