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USD Pares Gains In Asia, CNY Comes Off Highs

The USD pared some of the gains it made last week against Asian currencies - Without any clear direction in morning trading in Asia, the dollar pared some of the gains it made last week against Asian currencies after a mild stock-market rebound in the US on Friday.

The Chinese yuan also came off multi-year highs against the dollar to start off a short week in China trading. The long Chinese New Year holiday kicks off Friday.

The dollar opened the week up against some Asian currencies. The greenback was, for example, up against the Japanese yen in mid-morning trading. The USD/JPY was trading at 108.73 at mid-morning. The USD/AUD also gained against the Aussie dollar, with AUD down 0.23% to AUD1.2768 to the USD.

The US Dollar Index, which tracks the dollar against a basket of currencies, was down 0.31% to 90.17 in mid-morning in Asia.

Rumors of the reappointment of Haruhiko Kuroda as Bank of Japan Governor after his first term ends in April came out over the weekend and received some attention, as Bank of Japan’s monetary policy is now expected to remain ultra-loose, which may temper the gains of yen.

Focus this week is also on the January employment data of Australia that is coming out on Thursday.

The dollar also gained against the CNY/USD, trading in mid-morning at CNY6.3009, up 0.21%.

The People's Bank of China set the fix rate for the yuan at 6.3001 on Monday, up from 6.3194 last Friday. The fix rate is the mid-point around which the yuan is allowed to trade with movements of 2% on either side of the fix permitted.

The Chinese yuan hit all-time highs against the USD last week, with the Chinese currency gaining ground as the USD weakened in the face of a strong economy, expectations of higher interest rates and a stock market rout. The CNY's fix at 6.2822 on Thursday was the highest since August 2015, according to the China Foreign Exchange Trade System.

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