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U.S. Dollar Unchanged; Yuan Falls as PBOC Debuts New Loan Prime Rates

Investing.com - The U.S. dollar was unchanged on Tuesday in Asia, while the Chinese yuan fell as the country’s central bank debuted a new loan prime rates announced on the weekend.

The U.S. dollar index was largely unchanged at 98.210 by 11:20 PM ET (03:20 GMT). The index hovers around three-week highs as the 10-year U.S. Treasury yield pulled further away from a three-year trough of 1.47% marked last week, which sparked concerns of a potential recession.

Looking ahead, this week’s Jackson Hole symposium and Federal Reserve Chairman Jerome Powell’s speech will be the main focus for the dollar. Following recent recession fears, some analysts believe the Fed might cut rates by another 25 basis points at the next policy meeting in September.

The USD/CNY pair gained 0.2% to 7.0634. The Chinese yuan fell against the dollar even after the U.S. extended a license that allows tech giant Huawei to continue doing business with U.S. companies. U.S. President Donald Trump said this week that he was not ready yet to make a trade with China.

The People’s Bank of China today debuted its new loan prime rates under a new mechanism that was revealed on Saturday. The interest rate reforms help lower borrowing costs for companies and support slowing growth, which has been hit by the trade war with the U.S.

The USD/JPY pair slipped 0.1% to 106.52. The AUD/USD pair and the NZD/USD pair both climbed 0.2%.

The Reserve Bank of Australia said today that it is ready to ease further if evidence suggests a boost is needed for the economy.

“The board judged it appropriate to assess developments in the global and domestic economies before considering further change to the setting of monetary policy," the central bank said in a statement.

“Members would consider a further easing of monetary policy if the accumulation of additional evidence suggests this was needed to support sustainable growth.”

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