The US dollar depreciated sharply against major currencies on Tuesday following China's move to raise the yuan exchange rate to its highest margin since it no longer relied on the US dollar in 2005.
China's central bank officially set the exchange rate at 6.4760 per dollar before the market opens today. It is an increase of 1% and is a major change since 2005.
Not surprisingly, it can be seen in today's trend that the dollar-yuan has declined to 6.44 and may fall below that level. At the same time, the New York Stock Exchange stated that it no longer intends to remove three Chinese telecommunications companies from the list. The announcement has raised questions about previous U.S. actions that blacklisted several Chinese companies.
In addition to the US dollar, the actions of the Chinese central bank also affected the Australian currency which recorded a strengthening. The US dollar index, which measures the greenback against major currencies, declined 0.13% to 89.735.
The US dollar fell 0.3% against the yen to 102.81 yen. The US dollar was down as low as 102.81 on Monday for the first time since March.
The Pound Sterling trade was initially back in risk after being shaken by the announcement of economic closure or 'lockdown' in the UK by Prime Minister Boris Johnson. However, the announced preventive measures have been able to boost GBP sentiment.
