The dollar rallied with gold as China’s yuan slipped to a two-year low after China cut interest rates for the second time in three months. Oil retreated following its first monthly gain since June.
The Bloomberg Dollar Spot Index increased 0.2 percent at 10:54 a.m. in Hong Kong as China’s currency traded at its weakest level since October 2012 and the euro slipped 0.2 percent. Gold climbed 0.7 percent. The Hang Seng Index and Shanghai Composite Index advanced, while contracts on the Standard & Poor’s 500 Index added 0.1 percent. Oil in New York and London dropped at least 0.6 percent after OPEC output exceeded its quota for a ninth month in February.
China’s second rate cut in 14 weeks was the latest in a wave of global easing that underscores diverging economic outlooks for the U.S. versus the rest of the world. A private measure of factory activity in Asia’s largest economy showed a faster-than-estimated expansion Monday as lawmakers prepare to meet in Beijing. Indonesia, Thailand and the euro area update on consumer prices, with oil’s slump damping inflation expectations globally.