FX round-up: Chinese yuan, Turkish lira steady against US dollar

Sterling edged higher on Thursday, joining in the more steady tone to risk appetite in markets generally.

News that Beijing and Washington were moving openly to restart trade talks and that Chinese officials were reining in the ability of the nation's banks to facilitate short-selling the yuan helped steady sentiment.

Sentiment steadied on the back of that news, and a report that Beijing was reining in liquidity in the offshore yuan market, with the Greenback trading 0.71% lower versus the yuan to 6.8853 as of 2101 BST, which in turn saw the US dollar spot index slip 0.06% to 96.6390.

For its part, the pound was ahead by 0.14% to 1.27160 US dollars, alongside similar gains for other major currencies like the yen and euro.

In parallel, the Turkish lira was again extending its rally from the day before against the US dollar, helping to buoy sentiment around the Emerging Markets space.

Versus the lira, the dollar was off by 1.91% at 5.8332, by 0.58% to 29.7019 against the Argentine peso and declining by 0.65% in its cross with the Mexican peso.

The Greenback was also down against the Russian rouble, losing 0.61% to trade at 66.8941.

As measured by the US dollar spot index, against the currencies of its major trading partners, the Greenback was slipping 0.09% to 96.6070.

Earlier, Turkish finance minister, Berat Albayrak, had held a conference call with 6,000 global investors, telling them that imposing capital controls was not an option.

Instead, he said, the focus would be on cutting inflation and narrowing the current account deficit.

Some traders however were less than convinced.

Notably, Allianz chief economic adviser, Mohamed El-Erian, appeared to give a resolution of the China-US trade spat the benefit of the doubt, but he was more cautious when it came to the outlook for Turkey.

In remarks to Bloomberg, El-Erian said: "Turkey is trying to rewrite the crisis management chapter in the playbook for emerging markets. It’s trying to go without interest rate hikes. It’s trying to do it without the IMF. That’s hard. It’s not impossible, but it's hard.

To take note of as well, the Greenback was off an earlier low against the lira of 5.6968, after US Treasury Secretary Steve Mnuchin threatened more sanctions against Ankara if it did not free jailed US pastor Andrew Brunson.