Forex – Dollar Little Changed; Yuan Falls After Huawei CFO Arrest


Forex - Dollar Little Changed; Yuan Falls After Huawei CFO Arrest – The dollar was little changed on Thursday while the Chinese yuan fell after the arrest of the CFO of tech giant Huawei Technologies.

The U.S. dollar index that tracks the greenback against a basket of other currencies last traded at 96.970 by 11:40 PM ET (04:40 GMT), down 0.04%.

“The dollar could remain under pressure until this month’s Fed meeting as long-term Treasury yields may not be able to mount a rebound until the market sees the Fed’s stance on policy and the economy,” said Junichi Ishikawa, senior FX strategist at IG Securities in Tokyo.

The dollar is under pressure this week amid concerns about economic growth following an inversion of the U.S. Treasury yield curve.

The two-year/10-year spread was at its flattest this week in more than a decade amid a sharp fall in long-term rates. A flatter curve is seen as an indicator of a slowing economy.

Meanwhile, the USD/CNY pair gained 0.32% to 6.8777. Canada’s Department of Justice said on Wednesday that Meng Wanzhou, CFO of Huawei, was arrested in Vancouver due to violations of U.S. sanctions. She is facing extradition to the United States, according to various media.

The news broke after the U.S. and China agreed to halt the planned increase in tariffs to 25% from 10% on Chinese imports earlier this week.

The People’s Bank of China (PBOC) set the yuan reference rate at 6.8599 vs the previous day’s fix of 6.8476.

The AUD/USD pair declined 0.6% to 0.7225. Data on Thursday showed Australia trade surplus in October came in at around AUD 2.3 billion instead of the expected AUD 3.2 billion from a Reuters poll.

Elsewhere, the GBP/USD traded 0.05% lower to 1.2727. A Reuters poll suggested that the pound could fall as much as 2.75% should the parliament reject the Brexit deal next week.

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