Pressure on the yuan is growing amid the Evergrande crisis; commodity currencies are growing after oil

The yuan in the offshore market is trading near a one-month low on Tuesday, while safe-haven currencies are rising as investors seek refuge in the face of potential default by Chinese developer Evergrande.

Commodity currencies rose after oil, and the Canadian dollar rose after the victory of the country’s ruling party in the elections.

On the offshore market, the yuan paired with the US dollar rose by 0.08% to 6.4759 after falling to 6.4879, the lowest level since August 23. The yuan on the mainland market fell by 0.14% to 6.4655.

“It seems that the market was waiting for the Chinese authorities to take action over the weekend to calm the markets and contain concerns about the spreading consequences of the impending default of Evergrande, but this did not happen,” Chris Weston of Pepperstone wrote in a note to clients.

“Traders feel that a credit event is coming.”

Wells Fargo analysts expect the yuan to fall to 6.60 per dollar next month, the lowest value since November last year.

The dollar index against a basket of six major currencies fell by 0.09% to 93.195.

The US currency rose earlier amid expectations that the Federal Reserve will signal the start of curtailing stimulus measures at a two-day meeting that will end on Wednesday.

The euro rose 0.03% to $1.1728, while the pound sterling rose 0.07% to $1.3667. The Japanese yen fell 0.19% against the dollar to 109.6 yen.

The Bank of Japan will decide on monetary policy on Wednesday, although no changes in its large-scale stimulus program.