The dollar strengthened its gains today, Tuesday, as traders struggle to keep up with the mixed growth forecasts for the world's two largest economies; however, they paid little attention to a new disappointing set of Chinese trade data. Data released today showed that China's imports and exports fell at a much faster pace than expected in July, with imports down 12.4% compared to a year ago and exports down 14.5%, indicating another setback in China's economic recovery.
The depreciation of the yuan and the Australian and New Zealand dollars initially worsened following the data release, but all three currencies later recovered some losses due to bets that the weak data would heighten the need for further stimulus measures from Beijing. The yuan fell in offshore trading to its lowest level in over two weeks at 7.2334 to the dollar, and also fell in the domestic market to a low of 7.2223 to the dollar. The Australian dollar declined 0.38% to 0.6549 dollars, while the New Zealand dollar dropped 0.55% to 0.60735 dollars.
The dollar rose broadly, increasing 0.6% against the Japanese yen, trading at 143.26 yen in the latest transactions. Although currency movements were modest at the start of Asian trading, the dollar strengthened its gains during the session amid fragile risk appetite and the failure of Asian stocks to follow the upward trend of Wall Street. The British pound fell 0.25% to 1.2753 dollars, while the euro dipped 0.09% to 1.0991 dollars. The dollar index rose 0.18% to 102.26, moving away from the week's low it recorded on Friday following a mixed report on U.S. jobs, which indicated a decline in labor market strength while maintaining its resilience.
