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Wild trading in Asia Pacific markets despite China's boost for yuan – live

Discussion in 'Market News' started by Lily, Jan 8, 2016.

  1. Lily

    Lily Forum Member

    Aug 29, 2015
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    Investors have been buoyed by the People’s Bank of China’s decision to boost the yuan for the first time in nine days. But will it last? Follow the latest developments with Martin Farrer

    Australian shares and dollar hit again
    US market woes continue

    2.32am GMT

    It’s not easy to keep track this morning but here are the main points.

    2.18am GMT

    It should be said at this point that the volatility of the Chinese markets is much more significant for what it tells us about policy-making in Beijing than the intrinsic importance of the numbers. Most people accept that the share prices in China are totally overvalued and must be allowed to fall. But it’s the disorderly manner in which this is happening which makes it interesting.

    Related: Investors nervous as China looks set to repeat mistakes of last summer

    1.59am GMT

    Are you keeping up at the back?

    It’s a confused picture today and no mistake. The chart in this tweet is quite helpful though. Thanks to Patrick McGee of the FT.

    1.56am GMT

    Traders were following China’s lead upwards. But the Chinese markets are all over the place. After an early rally, the Shanghai Composite index and the CSI300 index of leading shares are heading south again.

    How low will they go?

    1.46am GMT

    Decent Australian retail sales for November helped boost the ASX.

    They were up 0.4% boosted by a 1% rise in the cafes and restaurants category, yet proof if any were needed that Australians just love to eat out. Household goods sales increased by 0.9%.

    1.37am GMT

    Stock markets have rallied across Asia Pacific.

    The Nikkei is down just 0.24%, while the ASX/S&P 200 in Australia is now into positive territory.

    1.35am GMT

    It’s the first time the PBOC has fixed the yuan stronger in nine days. A lower number equals a stronger fix because it relates to what it takes to buy one US dollar.

    The People’s Bank of China set the midpoint rate at 6.5636 per dollar prior to market open, firmer than the previous fix of 6.5646, and firmer than the previous day’s closing quote 6.5929.

    That is the first time the PBOC has firmed the midpoint against the dollar in 9 trading days, after it allowed the biggest fall in the yuan in five months on Thursday, pressuring regional currencies and sending global stock markets tumbling as investors feared it would trigger competitive devaluations.

    1.27am GMT

    The Australian dollar is an immediate beneficiary of this stronger yuan fix.

    The Aussie has gained almost half a cent in the last 10 minutes and is now buying US70.60c.

    1.24am GMT

    The yuan fix is a good deal more stabilising than previous ones this week.

    Last night’s close was 6.5929 to the US dollar which means the PBOC has opted for a more confidence-boosting currency level for now.

    1.20am GMT

    Yuan fixed at 6.5636

    1.17am GMT

    Only a few minutes before the People’s Bank of China announces today’s fix for the yuan. A weaker than expected fix has twice triggered market crashes this week so this is going to be a key moment.

    Yesterday China published figures for foreign reserves which showed it was burning through cash to prop up the yuan. So will they stick or twist today?

    1.10am GMT

    Good morning and welcome to the live blog. It’s been another lively morning on the financial markets and it’s tense ahead of the opening of the Chinese mainland markets at 12.30 AEDT.

    The Chinese regulator has scrapped its controversial “circuit-breaker” mechanism which has been triggered twice this week when losses hit 7%, forcing the markets to cease trading.

    Related: Australian share market plunges below 5,000 points amid China fears

    Continue reading...

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