Asian stock mired in soft patches after US calls China currency manipulator

by   |  VIEW 295

Asian stock mired in soft patches after US calls China currency manipulator

On Tuesday, the 6th of August 2019, a basket of Asian stock indices had echoed the leads of yesterday’s (August 5th) steepened losses of US stock indices, while a majority of Asian stocks were downing deeper into the reds after US Treasury’s Mnuchin had designated China as a currency manipulator, heating up angsts further between the world’s first- and second-largest economy after a rapid escalation of trade year over the recent weeks.

In point of fact, US Treasury Secretary, Steven Mnuchin had been quoted saying late US hours on Monday (August 5th) that US President and his Administration had agreed that Beijing had been manipulating its currency and intervening directly into the FX market, however added that Washington would soon engage International Monetary Fund, a sister-organization of World Bank responsible to foster monetary cooperation among 189 countries, to eliminate unfair market advantage of Beijing.

Addressing to China’s $3,210 billion foreign currency reserve, about six-times of its closest, Switzerland with roughly $527 billion in foreign currency reserve as of August 5th, which could devalue its currency up to 9 per US dollar without selling off much of its internationally-traded Yuan at a lower price, a head of global G10 FX research at Standard Chartered Bank, Steve Englander wrote in a client note, “Given the fragile state of markets, this is likely to be viewed as an escalation of the trade war and exacerbate the market sell-off.

In market terms, the designation, however meretricious, will likely be seen as a further ramping up of the trade dispute and possibly leading to some reaction by China. Quoting statistics, during midday Asia-Pacific trading hours on Tuesday (August 6th), MSCI’s broadest index of Asia-Pacific shares outside Japan shrugs off 1.5 percent to breach its lowest level since January, while mainland Shanghai Composite shed 2 percent and Japan’s Nikkei retreated 2.1 percent.

Meanwhile, South Korean KOSPI curbed 1.8 percent, New Zealand’s NZ 50 wrapped up Tuesday’s (August 6th market 1.84 percent lower, while Australia’s ASX 200 pummeled 2.53 percent on Tuesday’s (August 6th) market wind down.