The Chinese yuan surged to its strongest level in over three years against the U.S. dollar, which fell broadly after the U.S. Treasury announced plans to increase long-term bond buybacks. The move is bolstering the appeal of Chinese assets among global investors.
The U.S. dollar is on track for a weekly decline, trading near a three-month low as a rebound in Treasury yields overshadowed a government plan to increase bond buybacks. The yen strengthened on inflation data, while most other Asian currencies gained.
A brief respite in global bond markets has ended, with US Treasury yields pushing back toward 19-year peaks amid persistent concerns over fiscal deficits, inflation, and heavy debt supply.
Most Asian currencies are on track for weekly gains, supported by a broad decline in the U.S. dollar that has overshadowed pressure from rising Treasury yields.
The U.S. dollar is heading for a weekly loss as investors view the Treasury's expanded bond buyback program as a temporary fix, raising deeper concerns about the nation's fiscal health and rising debt.
The Canadian dollar strengthened to its highest level against the U.S. dollar in nearly three months, buoyed by a significant rise in crude oil prices and ongoing trade negotiations between Canada and the United States.
India's government has revised its trade policy to allow exporters receiving payments in rupees to access the same benefits as those using foreign currencies, a strategic move to encourage the rupee's role in international commerce.
The British pound gained against the U.S. dollar after a surprise drop in American retail sales for July dampened market bets on a September interest rate hike from the Federal Reserve.
The pound sterling slipped on Tuesday as a stronger U.S. dollar, supported by rising energy costs and higher Treasury yields, weighed on the currency pair. Traders are now looking ahead to key inflation and employment data from both the U.S. and the U.K.
