Dollar gains after China's yuan move
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The dollar gained against a basket of major currencies on Monday after China's decision to allow its currency to be more flexible boosted market's optimism in recovery.
The People's Bank of China (PBOC), also known as the central bank, said Saturday that it decided to proceed even further with the reform of the Renminbi exchange rate to add flexibility to the RMB exchange rate.
Analysts believe that the above decision should boost purchasing power and demand in the Chinese domestic market. It should also benefit those global companies that sell to China and underpin commodity-tied currencies such as the Australian dollar.
The dollar didn't decline as investors recognized that the yuan move will be gradual. The PBOC said Sunday it will not conduct a one-off revaluation of the RMB exchange rate.
In late New York trading, the euro dipped to 1.2324 dollars from 1.2364 dollars late Friday, and the British pound edged lower to 1.4762 dollars from 1.4799 dollars.
In other trading, the dollar rose to 90.99 Japanese yen from 90. 73 yen, rallied to 1.1114 Swiss francs from 1.1098 francs, and edged up to 1.0231 Canadian dollars from 1.0222 Canadian dollars late Friday.
