Dollar Falls And Yuan Stabilizes After The People’s Bank of China Intervened to Curb Gains

The dollar hovered near a five-month low on Tuesday, June 1 as investors awaited eurozone inflation data and the US manufacturing sector survey, while the yuan stabilized after China’s central bank adopted steps to stem its rally.

The dollar index returned to decline from the level of 90 in European trading, after recording 90.447 on Friday, when a measure of inflation closely monitored by the Federal Reserve recorded the largest annual increase since 1992. The index fell 0.3% yesterday, amid weak trading due to a holiday in the United States and Britain.

US Federal Reserve officials, led by its Chairman Jerome Powell, have repeatedly said that they expect price pressures to be temporary, and that monetary easing will continue for some time, but investors fear that a strong recovery from the pandemic will force them to do otherwise.

The Australian dollar was up about 0.5% against the dollar at 0.77625.

The New Zealand dollar rose 0.1% to 0.72845.

The yuan stabilized after authorities instructed banks to increase foreign exchange holdings, in a move believed to be an attempt to curb the yuan’s rapid rise.

The yuan settled outside at 6.3726 on the day, after breaking above a psychologically important level of 6.40 last week and touching a new three-year high of 6.3524 on Monday.

The sterling reached its highest level in three years at 1.425 dollars during Asian trading, and it had recorded gains for four months in a row as the outlook for the local economy improved.

it rose 0.1% to $ 1.42315.