Article by ForexTime

The dollar gained traction against the Yen on Thursday following a third consecutive devaluation by the Peoples Bank of China.  Thursday’s version was less intense than the prior two with the PBoC reducing the value of the Yuan by 1.1% compared to the 1.6% and 1.9% in the prior two days.

The central bank held a press conference to explain the devaluation arguing that there was no economic basis for the currency to continue depreciating, and that it would keep it stable. The PBoC had also intervened during its overnight session, when it trimmed losses in the CNY of nearly 2% to just 1%. The central bank also said that the way the reference rate for the new session was modified would now incorporate the currency’s close from the previous session, as well as demand and supply conditions.

Most other Asian currencies managed to rebound, and stock and commodity markets picked up. USD/JPY recouped about half of Wednesday’s decline, partly on dollar strength and partly as the yen corrected as stock markets moved higher.  Support on the currency pair is seen near the 10-day moving average at 124.40, while resistance is seen near Wednesday’s highs at 125.27.

Article by ForexTime

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