Dollar gives ground to higher-risk currencies as Chinese shares soar

The U.S. dollar fell against most currencies on Thursday as a rally in riskier assets such as global equities and commodities put a dent in safe-haven demand for the U.S. currency. China’s yuan rose to a four-month high against the dollar, extending recent gains as investors of all stripes increased positions in Chinese stocks due to growing signs of a recovery in the world’s second-largest economy.

The euro was up 0.2% at $1.1355 even after German export data failed to meet analysts’ expectations. The common currency jumped earlier to a one-month high of $1.1371. The British pound rose 0.3% to $1.2647, a three-week high. The Chinese yuan soared to a four-month high of 6.9808 in the offshore market and was last up 0.2% against the dollar.

China’s currency has been a star performer as investors shrug off diplomatic tension between Washington and Beijing to focus on China’s improving economy and its attractive technology sector. The yuan has risen around 2.3% from a seven-month trough against the dollar set on May 27. Chinese shares continued their recent rally, with the blue-chip CSI300 index soaring to a five-year high on Thursday. Elsewhere in currencies, the Swedish and the Norwegian crowns rose to a one-month high against the dollar of 9.15 and 9.35 respectively.

Dollar gives ground to higher-risk currencies as Chinese shares soar, Reuters, Jul 9