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Investors will keep a sharp eye on the Labor Department’s monthly jobs report on Friday, which will be the last one before the Fed meets on September 16-17.

Following a six-year run-up in U.S. stocks that has pushed major indexes to all-time highs, investors worry the economy could falter if the Fed raises rates too soon, chocking economic growth.

“If capital were to leave emerging economies, especially those that peg their currencies against the dollar, the natural thing to do is to sell Treasuries”, said Gene Tannuzzo, portfolio manager at Columbia Threadneedle Investments in Minneapolis.

The People’s Bank of China reformed the exchange rate formation system on August 11 to better reflect market development in the exchange rate of the Chinese yuan against the US dollar.

On Friday, the People’s Bank of China set the yuan midpoint at 6.3990 yuan to the dollar, slightly stronger than Thursday’s levels.

The daily said that market capitalisation fell by Rs. “This is the biggest one-day slump in China since 2007”.

Some people on Twitter called it “Black Monday”.

The cause of the global market volatility centres on fears that the world’s second biggest economy is slowing. “And I don’t see any signs of meaningful government intervention”.

Play video “China’s Economy: What Happened?”

The latest session saw the main index in Shanghai dive by a further 8.5%, deepening its recent heavy slump and meaning it has lost all its gains for 2015.

By increasing demand for them, the government hopes prices will rise. As the slide highlighted on Monday, those efforts have not been a success.

Yet those gains would come at the expense of manufacturers in other countries, including the United States and Europe.

As the selling accelerated, some benchmark indexes were at or near 10 per cent below their recent peaks – a “correction” in Wall Street parlance.

A private factory gauge unexpectedly fell to the lowest level in more than six years, data Friday showed. At the same time, policy makers also expressed concerns that given recent drops in commodity prices inflation is still too low to justify an interest rate increase.

In an effort to calm volatile markets, the PBOC said late last week it sees no reason for the yuan to fall further. Commonwealth Bank currency strategist Richard Grace said the Australian dollar will come under pressure from the lower yuan, as well as from factors such as lower...