Chinese turmoil boosts dollar, hits smaller currencies
Sharp slowdown in China's huge economy gave solid boosts to the US dollar and Japan's yen.
NEW YORK (AFP) - More evidence of the sharp slowdown in China s huge economy Monday battered emerging currencies while giving solid boosts to the US dollar and Japan s yen.
The sudden breakdown in relations between Gulf rivals Saudi Arabia and Iran, over Riyadh s execution of a Tehran-supported Shiite cleric, also added to market nervousness and the flood into the greenback.
The dollar added 0.3 percent on the euro, to $1.0833 per euro, but slipped 0.7 percent to 119.42 yen.
The greenback surged 1.3 percent to $0.7184 per Australian dollar, the latter hit by the threat China s continued slowdown poses for Australia s key ore exports.
The British pound also gave up ground, to $1.4721.
Among emerging currencies, China s yuan took another fall, losing 0.4 percent to 6.54 per dollar, a nearly four-year low.
Brazil s real plummeted 2.0 percent to 4.05 per US dollar, its lowest level since October, amid worries that China s weakness also spells lower demand for Brazil s already hard-hit commodity exports.
"The proximate cause for the carnage was weaker-than-anticipated manufacturing PMI figures" for China, said Matt Weller of Forex.com in a client note.
However, he argued, "while traders remain uneasy about China, the broader outlook for emerging markets is more optimistic (or at least less pessimistic)."
