The Chinese yuan rebounded on Tuesday in Asia following reports that China’s state-backed funds, also known as the “National Team,” have injected cash into the market as an attempt to support local stocks and currency.
The USD/CNY pair edged down 0.1% to 6.8712 by 12:01 AM ET (04:91 GMT). Citing unnamed sources, the Hong Kong Economic Times reported that China’s National Team intervened and injected funds into the markets, but the report did not provide any further details. The news boosted investor sentiment and Chinese stocks rose immediately following the report, before falling back into the red shortly after.
The yuan sank to four-month lows against the greenback overnight after Beijing announced Monday it was raising tariffs on $60 billion of U.S. products from June 1.
The move comes days after Washington escalated the trade tensions with a tariff hike on $200 billion of Chinese products on Friday.
“I say openly to President Xi & all of my many friends in China that China will be hurt very badly if you don’t make a deal because companies will be forced to leave China for other countries. Too expensive to buy in China. You had a great deal, almost completed, & you backed out!” Trump tweeted over the weekend.
In an interview with CNBC, Treasury Secretary Steven Mnuchin said the two countries are “still in negotiations.” Trump also said the U.S. is in a “great position,” noting that “our economy has been very powerful; theirs has not been.”
Meanwhile, Trump said he will meet his Chinese counter Xi Jinping at next month’s G-20 summit in Osaka, Japan.
The safe-haven yen, which usually benefits during geopolitical or financial stress, was down 0.3% against the dollar at 109.59.
The U.S. Dollar index that measures the greenback against a basket of other currencies was little changed at 97.115.