Yen keeps advancing
On Wednesday, the Japanese yen continued to grow, as China's weaker than expected economic data reinforced the view that the end of the trade war was still a long way off, even if US President Donald Trump postpones the imposition of some additional duties.
Yuan remains at a slight minus
The offshore yuan remains at a slight minus against the dollar after China's closely watched industrial production statistics in China show the slowest pace in 17 years. Continental yuan rose against the dollar, thanks to stronger profit-taking.
The news that the United States will delay the introduction of certain duties supported Asian stocks, but optimism in the foreign exchange market quickly faded amid wider concerns about the prospects for resolving the US-China trade dispute, which, according to economists, drags on the Chinese economy and threatens the global economic growth.
The increasingly fierce clashes between protesters and police in Hong Kong, fears of Britain’s tough secession from the European Union and tensions in the Middle East mean that risk aversion is likely to only intensify, adding volatility to major currencies.
The dollar reduced some of its losses but was still down 0.3% to 106.48 yen in Asia.
The Australian dollar fell 0.2% to 72.45 yen, while the British pound fell 0.2% to 128.50 yen.
In relation to the offshore yuan, the dollar grew by 0.3% to 7.0331 yuan, while the continental rose to 7.0177 per dollar, stronger than its previous value of 7.0558.
Industrial production in China in July grew by 4.8% compared with the previous year, which was below the median growth estimate of 5.8% year on year and was marked by the slowest growth since February 2002, according to data obtained on Wednesday.
Retail sales and investment in Chinese fixed assets also grew less than projected in July, highlighting concerns that the trade war is causing serious damage to the world's second-largest economy.
The dollar index has not changed much and is at 97.755 after rising by 0.4% on Tuesday.
The euro is trading flat at 1.1172 dollars but fell by 0.2% to 119.07 yen.
European data on consumer prices and GDP will come from Europe later on Wednesday and may form a short-term direction for the single currency.
The pound sterling has not practically changed and is trading at the level of $ 1,2061, remaining within reach of the level of 1.2015 - the lowest since January 2017.
The UK will publish data on consumer prices today, but uncertainty about how the kingdom will leave the European Union overshadows the prospects for monetary policy of the Bank of England.
Start Forex trading >
Forex trading recommendations
EURUSD: Buy. Entry point – 1, 1163. Take profit – 1, 1183. Stop Loss – 1, 1129.
GBPUSD: Sell. Entry point – 1, 2063. Take profit – 1, 2036. Stop Loss – 1, 211.
AUDUSD: Buy. Entry point – 0, 6784. Take Profit – 0, 6800. Stop Loss – 0, 6756.