European stocks slumped on Thursday on further yuan depreciation by the People’s Bank of China which weighted on financial markets all over the world. Investors are concerned that the yuan devaluation may imply that the China’s economy is weaker than considered which may have a negative effect on the world economic growth. The EURUSD rate fell 0.5% to $1.0880 while the FTSEurofirst index and STOXX index lost 2% each. Speaking of the national indices, Germany’s DAX 30 lost 1.4% and UK’s FTSE lost 1.6%. Today the European stock indices are slightly gaining ground back following the Asian markets.
Asian stocks are rebounding today after the severe fall yesterday caused by yuan depreciation in China and the upward movement may support the European markets today. After the trading was suspended yesterday in China, the People’s Bank of China set a firmer yuan midpoint rate at 6.5636 per US dollar. The blue-chip CSI300 index added 2.7% while Shanghai Composite Index added 2.6%. Nevertheless, investors remain worried about the ambiguous China’s economic conditions.
Nikkei 225 closed 0.4% lower while the USD JPY fell to 118.35 yen a dollar after the yesterday’s 4-month high for yen of 117.33. investors were closing their position preferring to stay out of the market ahead of the US jobs report and the three-day holidays in Japan.
Oil prices are hovering near new historical lows with Brent oil prices falling yesterday 2.1% to $33.27 a barrel and WTI falling 1.6% to $33.69 a barrel. During the trading oil prices slid down below $33 a barrel but later managed to pare some losses. Excessive production, record stockpiles and worries about the China’s slowdown drive lower the commodity prices. Some analysts believe oil is likely to test $30 a barrel in the near future. Nevertheless, oil is rebounding today gaining around 2% on stronger Chinese market.
Gold futures edged up 1.5% to $1,109 an ounce with gold gaining ground as a safe haven asset amid tumbling financial markets. No surprise that given the today’s rebound in the global stock markets, gold is edging about 1% lower.
Copper prices fell 2.1% to $4,524 having touched the 6-year lows during the trading day.
This overview has an informative character and is not financial advice or a recommendation. IFCMarkets. Corp. under any circumstances is not liable for any action taken by someone else after reading this article.
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