Some see the tactic as a desperate attempt by China to shore up its economy, prompting concerns that the world’s second biggest economy could be even weaker than imagined.
Authorities were allowing the yuan to “move more flexibly”, Societe Generale s China economist Claire Huang told AFP.
Global stocks tumbled, with China’s Shanghai Composite Index closing almost 7% lower.
Global equity markets traded slightly lower yesterday after their worst first-day performance in years as concerns about the global economy weighed on sentiment and pushed traders to seek the relative safety of the low-risk yen.
Nervousness about the ongoing contraction among the Chinese manufacturers despite Beijing’s surprise devaluation in August sent traders to embrace traditional low-risk yen and Swiss franc.
“While fiscal support has helped slow the rate of economic deceleration, China needs to balance the need for stimulus with the reality of the unsustainable buildup in debt”. Japan’s Nikkei dropped 1.1 percent.
“The use of the circuit breaker is the main reason for the falls as investors panicked after seeing it being triggered on Monday”, Phillip Securities’ analyst Chen Xingyu told AFP.
New yuan funds outstanding for foreign exchange refers to the amount of yuan Chinese banks put into the domestic market when they acquire foreign currencies from individuals or companies.
The drag from industry comes as China makes gradual progress in its transformation to a more service-driven economy. The FTSE 100 index of leading British shares rose 0.7 percent higher.
WALL STREET: U.S. markets finished 2015 lower on Thursday. The events of last August were clearly influential in the Fed opting to hold off on raising interest rates in September and I am convinced that has this week come a month earlier, the Fed would probably have held off once again in December.
Furthermore, the end next Monday of a 6-month “lockup” on Chinese share sales by major institutional investors, may cause a massive evacuation from stocks, many fear. Big global banks forecast a 7 to 10 percent weakening of the yuan over the next 12 months, but it has begun the year with a decline of nearly 2.5 percent in just three days. South Africa’s benchmark share index slid as much as 3 percent to the lowest since December 14.
MIDDLE EAST: Saudi Arabia said Sunday it is severing diplomatic relations with Iran after protesters set fire to the Saudi Embassy in Tehran and Iran’s top leader criticized the world’s largest oil supplier for executing a prominent Shiite cleric.
The Japanese currency, traditionally sought at times of risk aversion, climbed to its strongest level since April against the euro and hovered at its highest since October versus the dollar.
More in AmeriPublications
South Korea appeals to China to rein in North over nuclear tests
South Korea’s Defense Ministry couldn’t immediately confirm the report.January 21, 2016
Satellite SpaceX fail as rocket topples over while landing
According to a message on Twitter wrote by SpaceX founder Elon Musk, one of the rocket’s landing legs didn’t latch into...January 21, 2016
Ruble Falls to 82 Against US Dollar, 90 Against Euro
Russian Federation is running a budget deficit of 3 percent of GDP this year, and the government is looking to cut...January 21, 2016
19 killed in university attack in Pakistan
He said the operation had ended and security forces were clearing the area, with most of the student victims shot dead...January 21, 2016
Moldova political crisis: Protesters break into parliament
Police arrested several protesters after they clashed with security forces and broke into the parliament building on Wednesday, according to local...January 21, 2016
Military step up search and recovery operation after Somalia raid
MOGADISHU Somalia (Xinhua) – Somalia’s Islamist militant group Al-Shabaab claimed on Sunday to have killed 100 Kenyan soldiers serving under the...January 21, 2016
Sarah Palin: Speculation rife former Alaska governor set to endorse Donald Trump
“And that starts from the top”, she said. “You deserve the best!”January 21, 2016
Bombing close to Russian embassy in Kabul kills 7
At least seven people died on Wednesday when a suicide bomber targeted the Moby Group, a major media production company in...January 21, 2016
NYS Health Officials Advise MDs to Watch for Zika Virus
The move comes after United States health chiefs issued an alert on Friday advising pregnant women to avoid travelling to Brazil...January 21, 2016