Asian markets on bid tone as China allows "flexible" Yuan; Euro and Pound, strong

FXstreet.com (Barcelona) - Asian markets continue trading on the positive tone witnessed over the last two weeks, with most sectors posting gains after Chinese Government announced more flexibility on Yuan exchange rates. In FX markets, Euro and Pound remain strong, favoured by demand for risk.

Japanese Nikkei Index rallies 1.8%, while Hong Kong's Hang Seng Index adds 2.8% and Chinese Shanghai Composite Index rises 2%. South Korean Kospi Index advances 0.9%, and Australian S&P Index rises 0.7%.

Investor's appetite for risk has been fuelled by Chinese's Central bank's decision to end its two-year peg to the Dollar. The Bank announced more flexibility on Yuan's exchange rate, although the PBOC discarded a dramatic revaluation of the Chinese currency, which, so far on Monday, has not suffered any change.

Euro and Pound rise further

EUR/USD remains trading on a steady upside channel from 4-year low at 1.1875 on Jun 7, extending on Asian session to levels right above 1.2450, 4-week high, with immediate support at 1.2355/60.

GBP/USD is breaking higher ahead of the European opening, and upside move from 1.4345 low on Jun 7 has extended above 1.4885 resistance area, to hit a fresh 5-week high at 1.4935.

USD/JPY decline from 92.10 on Jun 14 extended lower on Asian session opening, and the pair hit a fresh 3-week low at 90.10 to pick up through the session and return to day-high levels high around 90.95.

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