WASHINGTON: The dollar was flat on Friday but set for a fifth consecutive week of gains in its longest winning streak for 15 months, buoyed by demand for safer assets on worries over China’s economy and bets that US interest rates will stay high.
The People’s Bank of China (PBOC) set a much stronger-than-expected daily fixing, lifting the yuan from a 9-month low hit on Thursday.
The yuan weakened against the dollar to 7.3060 in offshore trading after the PBOC set the official mid-point at 7.2006, more than 1,000 pips stronger than Reuters’ estimate.
China’s economic troubles have deepened, with property developer China Evergrande seeking Chapter 15 protection in a US bankruptcy court. Concerns are also growing over default risks in its shadow banking sector.
The US dollar index, which measures the currency against six peers, edged 0.01% lower at 103.380, after touching a new two-month high of 103.680 earlier in the session. For the week, it is set to gain 0.5%.
The Japanese yen strengthened 0.38% versus the greenback at 145.29 per dollar after reaching a nine-month low of 146.56 on Thursday.
The Australian dollar, which often trades as a proxy for China, rose 0.04% to $0.640, after hitting a nine-month low of $0.6365 on Thursday.
Elsewhere, sterling fell 0.05% to $1.2741 after British retailers reported a bigger-than-expected drop in sales in July. The euro edged 0.04% higher at $1.08745, after touching on Thursday a six-week low of $1.0856.
Meanwhile, the world’s biggest cryptocurrency, bitcoin, slipped 2.33% to $26,020 after dipping to a fresh two-month low, adding to a more than 7% plunge on Thursday, as a wave of risk-off sentiment grips world markets.
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