It has been a painful week of trading for the dollar. The Greenback has essentially reversed its recovery from the previous two trading weeks, to return back toward levels not seen since December 2014.
In the previous editions of the Market Overview, we have already analyzed the relationship between gold and some major world currencies, such as the U.S. dollar, the euro, or the Japanese yen. But what is the link between the Chinese yuan (officially: renminbi) and the yellow metal?
“Sell volatility, buy the dip” has been the investor mindset for some time when it comes to the equity markets. It appears that this mindset is holding firm, after investors brushed away the market uncertainty that was created in the early hours of Tuesday morning, following the news that North Korea fired a missile over Japan.
Any optimism that the South African Rand (ZAR) would continue its attempt to strengthen against the USD, appears to have gone out the window—following the news that Jacob Zuma survived another no-confidence vote.
China's central bank raised short-term interest rates on Thursday in what economists said was a bid to stave off capital outflows and keep the yuan currency stable after the Federal Reserve raised U.S. rates overnight.
China said on Friday it had no intention of using currency devaluation to its advantage in trade, responding to U.S. President Donald Trump's description of the Asian giant as the "grand champions" of currency manipulation.