Yuan hits weakest since Feb 2011 on fresh low midpoint

Futures on US shares declined after the S&P 500 added 0.2 percent Tuesday amid a retreat in shares of Apple Inc. On Thursday, it reportedly had intervened to defend the yuan in offshore trade, reversing a decline of more than 1 percent that took it to a record low of 6.7600 per dollar (CNH=).

On paper China’s market shouldn’t hold much sway over your investments.

ADZE IM senior emerging Asia economist Aidan Yao believes the “authorities are testing market tolerance for [yuan] weakness”, and that interventions might resume if wider market contagion is provoked by further falls by the yuan.

“People are skittish in holding positions”.

– Jesse Jiang and Heather Long contributed reporting. “If they don’t go up, you are in trouble”.

European stock markets plunged in morning deals following a heavy sell-off across Asia triggered by a suspension to trading in China, the world’s second biggest economy and key driver of commodities consumption.

The euro gained 0.7 percent to $1.0849.

That was 0.5 per cent weaker than the day before and the biggest daily drop since last August, when an abrupt near 2 percent devaluation of the currency also roiled markets.

China’s International Monetary Fund (IMF) reserve position was at US$4.55 billion, down from US$4.60 billion the previous month.

He said concerns are only near-term and the beginning of earnings season will “remind investors that the USA micro story hasn’t changed”. Over most of that period there was no trend in the dollar’s trade-weighted value.

For others, however, the mood is bleaker.

Stockbroker on floor of New York ExchangeWorld stock markets tumbled and oil plumbed new lows Thursday as investors feared for the global economy on signs of a dramatic slowdown in powerhouse China. The two benchmarks hit 12-year lows earlier in the week.

The pan-European FTSEurofirst 300 index and the euro zone’s blue-chip Euro STOXX 50 index were down 2.4 percent and 1.8 percent respectively, having fallen more than 3 percent earlier in the session.

It will also be the first reading since the Federal Reserve raised USA interest rates last month for the first time in nearly a decade. US 10-year Treasury notes were last down 4/32 in price to yield 2.1914 percent from 2.177 percent late Wednesday.

‘That would indeed be a severe shock to global markets, since it would effectively export the deflationary forces that are overpowering the Chinese manufacturing sector to the rest of the world, and would probably require direct measures to restore the health of the Chinese financial system.