On Monday morning, the People’s Bank of China set the exchange rate of the yuan against the US dollar at 7.1043 yuan per dollar.

Topic

The Yuan

Oil

The Yen

The Yuan

Expectations indicated that it would reach 7.2359 yuan, while the closing price of the currency pair in yesterday’s session was 7.1020 yuan. Additionally, the bank injected 2 billion yuan in 7-day repurchase operations in the markets at a return of 1.8%.

It should be noted that the People’s Bank of China influences the US dollar rate by pegging its currency, the yuan, to the US dollar. The bank relies on a fixed exchange rate policy, which differs from the free exchange policy followed by the United States and many other countries. However, there is a slight margin for the yuan to move within a narrow range.

Oil

Decline in Oil Prices:

Oil prices fell on Monday due to renewed focus on market fundamentals, after statements from Israel and Iran reduced the risk of escalating tensions in the Middle East following Israel’s limited military strike on Iran.

Brent crude futures fell by 67 cents or 0.77%, reaching $86.62 per barrel by 04:15 GMT.

Meanwhile, the nearest West Texas Intermediate crude contract for May delivery dropped by 63 cents or 0.76%, reaching $82.51 per barrel. The more active June contract also fell by 64 cents, priced at $81.58 per barrel.

The Yen

Japanese Yen Price Drop:

The Japanese yen declined in the Asian market on Monday against a basket of major and minor currencies, resuming its losses and reaching a 34-year low against the US dollar. It is approaching a loss in value against the dollar below the 155 yen barrier for the first time since 1990, due to the pressure of rising US ten-year Treasury yields.

Traders believe that Japanese authorities may intervene in the foreign exchange market to protect the strength of the yen if it trades below the 155 barrier. Verbal intervention may occur before actual intervention.

Setting the Yuan to USD Exchange Rate

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