Yen weakens as dollar holds solid

Story link: Yen weakens as dollar holds solid

The yen was weaker on the world’s currency markets on Tuesday as the People’s Bank of China said that last week’s small revaluation of its currency was not “a first step” toward further revaluation as many analysts had assumed.

The yen lost 0.8 percent in relation to the US dollar to ¥112.29, was down 0.4 percent to ¥134.82 against the euro, and declined by 0.4 percent to 195.45 in relation to sterling. Sterling was up a fraction in relation to the euro as a CBI manufacturing survey revealed better results than had been expected.

The euro, in turn, did not take any benefit from an advance in German’s Ifo index of business sentiment, which was up to 95 in July after posting a 93.3 in June. Analysts said that sentiment had been helped by the euro’s recent weakness as well as by the early elections which were announced by Germany.

The US dollar held solid despite some sell-offs when the Conference Board reported a decline in consumer confidence in the US. The greenback gained 0.3 percent to $1.2000 in relation to the euro, advanced 0.3 percent to $1.7399 against sterling, and was up 1 percent to C$1.2299 in relation to the Canadian dollar.

The Australian dollar lost 0.8 percent to $0.7573 in relation to the US dollar as business confidence was at a four-year low down under.