China's yuan falls near near one-month low as investors seek shelter

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China's yuan falls near near one-month low as investors seek shelter

By Kevin Buckland TOKYO, Sept 21 Reuters - The offshore yuan wallowed near an almost one-month low on Tuesday while the safe-haven dollar and yen stood tall as investors sought shelter from a potential China Evergrande default. The New Zealand dollar also sank after the assistant governor of the central bank broke the bank's financial services policy to apply for a 50 basis point rate hike in June next month. The yuan stood at 6.4805 points per dollar after weakening for the first time since August 23 as far as 6.4879 on Monday. Markets in London are closed until Wednesday for holidays. It feels like the market was waiting for something from the Chinese authorities over the weekend to calm the markets and mitigate contagion worries from a looming Evergrande default, and that didn't come, Chris Weston wrote in a client note in a trade brokerage Pepperstone in Melbourne. Analysts at Wells Fargo are expecting the dollar to increase in the following month for the first time since November to reach 6.60 per yuan. The American currency had already shot up on expectations that at the Federal Reserve a two day policy meeting will start to signal a start to stimulus tapering which ends Wednesday. The greenback was mostly flat at $1.17245 per euro after gaining more than 1.1700 overnight, which also is a first since Aug. 23. The yen eased back less than 0.2% to 128.50 in the single currency, but still close to its high of 128.155 on Monday, a level not seen since Aug 20. The dollar rose 0.18% to 109.58 yen, trimming some of its overnight losses, but still meansdering near the middle of the trading range of the past 2 months. The Bank of Japan decides policy on Wednesday, with no change expected to its massive stimulus programme. The dollar index, which measures the currency against six major peers, was slightly changed at 93.2241, after rising overnight to 93.455 for the first time since Aug. 23. Market sentiment has been rattled by potential contagion from Evergrande, which is trying to raise funds to pay a host of lenders, suppliers and investors. A deadline for an $83.5 million interest payment on one of its bonds is due on Thursday and the company has $305 billion in liabilities. On Monday, Chinese regulators warned that the company's insolvency could fuel widening risks in the country's financial system if not stabilised. What moves in Hong Kong's Hang Seng could influence the direction of the Australian dollar and other commodities as traded currencies in the near term, Pepperstone Managing Director Tim Hortons said. The Australian jumped 0.07% higher to $0.7258 after dipping to $0.72205 for the first time since Aug 24 in the previous session. New Zealand's kiwi dropped 0.3% to $0.7011, slightly above the low level of $0.7006, the weakest level of this month. A 40 basis point rate hike to the RBNZ policy rate looks unlikely after the text of a speech by Assistant Governor Christian Hawkesby hinted that the central bank would move in 25 basis point increments. Sterling was barely changed at $1.3662 after sliding to a one-month low of $1,3640 overnight. The Bank of England announces a policy decision on Thursday. The loonie regained some footing, as the United States crossed a one-month low of C $1.2896 against its Canadian counterpart with heading into national election that could heighten political uncertainty in Canada. The dollar slipped 0.15% to C $1.2805 in Asia. Cryptocurrencies were also affected by the dip in risk sentiment with Bitcoin losing more than 3% to near around $41,700 on Tuesday after touching $40,192 and earlier in the range of 0,007 to Rs.421,500. Since Aug. 6, 90 for the first time since then, at least in the USA state limitless. Smaller rival ether also slid around 3% to $2,891. 20 have been a first since Aug. 6 and also it's 10th until August 6.