NEW YORK (Reuters) - A contraction in Chinese exports engendered fears of a slowdown in the world's second-largest economy, sparking a risk-off move Monday which hurt the U.S. dollar against the Japanese yen, a safe-haven investment in times of geopolitical turmoil.
Market sentiment swung negative after data showed that China's exports unexpectedly fell in December, pointing to a further weakening of its economy and a gloomy growth picture.
"We did see a move lower in dollar/yen overnight that has held through the American session," said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets. The yen JPY= was last up 0.3 percent against the greenback.
Fears of a Chinese slowdown also initially hit the offshore yuan CNH=, but it was little changed on the day as of late afternoon Monday. The currency had rallied 1.5 percent against the dollar last week, its biggest weekly rise since January 2017. The rally reflected optimism in the progress of U.S.-China trade talks, though it was somewhat incongruent with recent sluggishness in China's economy.
"The biggest theme (in the market today) is 'risk-off.' The soft Chinese data sparked the sell-off and benefited the Japanese yen and at the cost of the Australian dollar," said John Doyle, vice president of dealing and trading at Tempus, Inc. China is Australia's largest trade partner and negative sentiment about its economy bodes ill for the Aussie dollar.
Market sentiment swung negative after data showed that China's exports unexpectedly fell in December, pointing to a further weakening of its economy and a gloomy growth picture.
"We did see a move lower in dollar/yen overnight that has held through the American session," said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets. The yen JPY= was last up 0.3 percent against the greenback.
Fears of a Chinese slowdown also initially hit the offshore yuan CNH=, but it was little changed on the day as of late afternoon Monday. The currency had rallied 1.5 percent against the dollar last week, its biggest weekly rise since January 2017. The rally reflected optimism in the progress of U.S.-China trade talks, though it was somewhat incongruent with recent sluggishness in China's economy.
"The biggest theme (in the market today) is 'risk-off.' The soft Chinese data sparked the sell-off and benefited the Japanese yen and at the cost of the Australian dollar," said John Doyle, vice president of dealing and trading at Tempus, Inc. China is Australia's largest trade partner and negative sentiment about its economy bodes ill for the Aussie dollar.
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