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Yen Gains; Aussie, Yuan Hit as U.S. Announces Tariffs on $200B in Chinese Goods

2018-07-11 14:00    Investing

Yen Gains; Aussie, Yuan Hit as U.S. Announces Tariffs on 0B in Chinese Goods Currency News

The yen climbed while the Aussie and the yuan retreated

Invesing.com – The yen climbed while the Aussie and the yuan retreated after the U.S. said it would impose tariffs on an extra $200 billion worth of Chinese imports on Tuesday.

The yen, often sought in times of political tensions and market turmoil, gained against a number of peers following the latest tariff news. The USD/JPY pair dropped to 110.85 by 12:30AM ET (04:30 GMT) after hitting a seven-week high of 111.355 yen earlier on Tuesday.

Meanwhile, the yuan retreated by the most in more than a week as the USD/CNY pair rose 0.6% to 6.6695, though it still kept some distance from 11-month low of 6.7344 touched last week.

"A key concern of China’s government is stability," said Investec Bank’s economist Ryan Djajasaputra. "If the trade situation deteriorated and the yuan witnessed further downward pressure, we would expect the authorities to step in, particularly if there were signs of capital flight.

The Trump administration said on Tuesday that it would impose tariffs on an extra 200 billion worth of Chinese imports, raising concerns of a full-blown trade war between the world's two biggest economies. The proposed list of goods includes consumer items such as clothing, television components and refrigerators as well as other technology products.

Administration officials said a two-month process would allow the public to comment on the proposed tariffs before the list is finalised, though U.S. President Donald Trump had warned earlier that his country may ultimately impose tariffs on more than $500 billion worth of Chinese imports

Elsewhere, the AUD/USD pair, considered a liquid proxy for China-related trades, fell 0.7% 0.7407.

The U.S. Dollar Index, which tracks the greenback against a basket of currencies, also fell 0.14% to 93.98 on Tuesday after the news.

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