Market updates on August 19
There were no major moves during the Asian trading session, however we have some events today, which may affect the sentiment in the market.
UK pound heads north
On Thursday, the UK currency managed to go up on reports that British Prime Minister Theresa has come to an agreement with the EU on financial services.
The currency pair GBP/USD jumped by up to 0.69% being worth 1.2854. EUR/USD added nearly 0.3%.
As the Times informed on Thursday, May and the EU finally reached an agreement on a long-awaited pact, which would provide British financial services companies with continued access to EU markets after Brexit.
In addition to this, the Chinese Yuan managed to inch up versus its US rival due to the fact the People's Bank of China set the national currency’s reference rate at 6.9670 in contrast with yesterday’s reading of 6.9646.
On Wednesday, China’s leader Xi Jinping told that the Chinese cabinet requires taking steps to withstand recent changing economic situation because downward pressure is going up. His remarks showed up after Wednesday’s data disclosed that the Chinese manufacturing sector expanded at a slower tempo in October.
On Wednesday, the Chinese Yuan hit its weakest value since the global financial downtime crisis, ending up with a reading of 6.9748 per dollar.
As some financial analysts pointed out, even if they observe clear indications that China’s major financial institution opposes a depreciation of the renminbi, but the depreciation pressure isn’t actually receding.
Nevertheless, market experts are still assured that China’s key bank won’t abandon the psychologically crucial 7 mark with great ease. It could provoke a capital flight, which would make it all the more difficult for the Asian country’s leaders to retain financial stability.
In addition to this, the currency pair AUD/USD rallied by 0.8%. Moreover, the Caixin China manufacturing PMI that managed to stay above the key 50 threshold for up to 17 months, was cited as backing the Australian dollar.
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