The yuan slid 3 per cent this week after Tuesday’s surprise devaluation and was little changed today.
The global forecast for the Asian markets suggests mild support, with upbeat economic data likely to support the oversold bourses of the region.
The H-share index dropped 1.75 per cent.
Currencies of regional exporters that compete with China or send goods there continued to slide even as investors’ focus returned to the Fed.
Canada’s dollar traded at 76.49 cents US, up 0.07 of a U.S. cent from Monday’s close.
The prospect of more attractive returns in the U.S. could attract money flows away from risker assets in emerging markets, including in Asia. With the earning season winding down, all eyes are on the Wednesday minutes of the Fed’s latest meeting.
“The US economy for now is not going at gangbusters, but it’s certainly not falling apart”, Mr Cardillo said.
ENERGY: U.S. crude oil fell 68 cents to $41.82 in electronic trading on the New York Mercantile Exchange.
The euro stood at $1.1075, stabilising for now after slipping 0.3 percent on Monday.
The USD/CNY now buys 6.4017, above the PBOC’s Tuesday fixing level of 6.3966. “The underlying issue of overpriced equities hasn’t been addressed in the slightest”, said Michael Every, the head of financial markets research at Rabobank.
FlexiGroup advanced 4.4%. The finance and leasing company reported a 44% increase in full-year profit and reiterated its outlook for fiscal 2016 profit.
That overhang is showing up in tighter market liquidity, with the People’s Bank of China on Tuesday injecting 120 billion yuan into the financial system in the biggest such boost since January past year, after a spike in the interbank lending rate. ANZ rose 0.8% after launching a USD500 million retail share purchase offer.
In Europe, Britain’s FTSE 100 dropped 0.5 percent to 6,515 while Germany’s DAX fell 0.4 percent to 10,897. Gross domestic product shrank 1.6% on an annualized basis in the April to June quarter. The yen was at ¥ 124.26 to the dollar.
Chinese companies trading in Hong Kong, as measured by the MSCI Index, are already far more expensive than their mainland counterparts. (1225.HK) plunged 23.4%, after the toys and medical products maker announced a share sale at deep discount. The benchmark for most mutual funds has lost just 7 points this month.
Asian economies are entering the second half of the year bracing themselves for headwinds from all directions, from a slowing China to higher interest rates and, in some cases, political battles at home.
But on Friday, the yuan held steady against the dollar after suspected intervention by the central bank, who said on Thursday there was no reason for it to fall further.