Black Monday struck hard yesterday when we possibly saw one of the worst days for the world’s markets since the recession of ’08, or, at least, when the Swiss decoupled from the euro at the start of the year. This happened, in part, because of a lack of fundamental data out from most majors to stand up to the Chinese devaluation of the yuan and related stocks, and the resulting slowdown in the World’s #2 Economy.The significant drop in oil prices has also not helped in that it has now forced the equity markets to drop in value by as much as 9%. The pound had its sharpest decline against the euro since 2009, dipping to its lowest level against the single currency since 2009.
Although GBP fared poorly against the single currency, it did well against the Kiwi and Aussie dollars, as well as the South African rand.Without any data from the UK today, it’ll be what’s occurring beyond that’ll be of interest in swaying market direction – particularly the fallout from China’s currency manipulation.

The euro was seen to consolidate against itself against the G10 currencies yesterday – this is most likely due to the flow of money into Europe – a ‘safe haven’ – following China’s decision, as well as the finalisation of the Germany-approved Greek bailout. This morning we have already seen German GDP come in as expected (0.4%), and later we’ll see German IFO business climate data.

USD was not immune to China’s devaluing exercise, dropping by 1% to an 8 month low with the market rife with worry and risk aversion. The pound hit a 2 month high against the dollar (1.5802), while the euro was seen to climb 2¢ in just half an hour.We’ll see PMI data out today as well as home sales.

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