TOKYO- The offshore yuan wallowed near an almost one-month low on Tuesday while the safe-haven dollar and yen stood tall as investors sought shelter from a potential China Evergrande default.
The New Zealand dollar also sank after the central bank’s assistant governor poured cold water on bets for a 50 basis point rate hike next month.
The yuan stood at 6.4805 per dollar after weakening as far as 6.4879 on Monday for the first time since Aug. 23. Mainland markets are shut for holidays until Wednesday.
“It feels like the market was waiting on something from the Chinese authorities over the weekend to calm the markets and ringfence the contagion worries from a looming Evergrande default, and that didn’t come,” Chris Weston, head of research at brokerage Pepperstone in Melbourne, wrote in a client note.
“Traders sense a credit event is coming.”
Analysts at Wells Fargo expect the dollar to reach 6.60 per yuan in the next month for the first time since November.
The US currency had already been rising on expectations the Federal Reserve will signal a start to stimulus tapering at a two-day policy meeting that ends Wednesday.
The greenback was mostly flat at $1.17245 per euro after gaining to $1.1700 overnight, also a first since Aug. 23. – Reuters
