On Monday, the dollar slipped slightly, staying close to two-year highs. Traders are now focused on key U.S. economic reports that could clarify the impact of the Federal Reserve's interest rate hikes.
Dollar's Position
Despite the slight slip on Monday, the dollar remains near its two-year highs. U.S. economic reports due this week will provide more information on the impact of the Federal Reserve's interest rate decisions.
Yuan Market
According to a Reuters report, the Chinese yuan was in the spotlight after weakening past the critical 7.3 per dollar mark in the onshore market on Friday. It was the first time in 14 months that the People's Bank of China (PBOC) worked hard to maintain the yuan's level throughout December.
Expert Opinion
Ray Attrill, head of FX strategy at National Australia Bank, noted that the PBOC seems to have stopped defending the 7.30 level. He remarked, 'This raises questions about whether they are now letting the dollar-yuan pair move into a higher range, which could impact other Asian currencies, as well as the Australian and New Zealand dollars.'
Thus, the current situation with the dollar and yuan is of particular interest to investors and analysts. In the coming days, the financial markets' response to U.S. economic reports and the Federal Reserve's policies will be a crucial factor.
