Asia-Pacific trading today saw Hong Kong’s Hang Seng fall 1.3 percent. Australia’s S&P/ASX 200 dropped 1.2 percent and Japan’s Topix index shed 0.3 percent. Overnight, Wall Street’s S&P 500 index reversed gains of 1 percent to close down 0.2 percent. The drop came after US President Donald Trump said he would hold a news conference regarding China on Friday after Beijing agreed the new legislation.
Elsewhere, onshore exchange rate for the renminbi, which investors have been watching as US-China tensions rise, was 0.1 percent weaker at Rmb7.1515 per dollar.
The People’s Bank of China set the currency’s trading band stronger than analysts had expected.
Larry Brainard, chief emerging markets economist at TS Lombard, told the FT: “Recent [renminbi] fixings by the PBoC suggest an effort to dampen volatility — not drive the currency lower.”
He added that the currency was set for “periodic bursts of volatility . . . but not of continuing steady depreciation”. Oil prices dropped on the prospect of further escalation in US-China tensions.
Brent crude, the international benchmark, was down 0.5 percent to $35.11 a barrel.
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6.08am update: Some sectors of Australian economy will need additional support – Prime Minister Morrison
Some sectors of Australia’s economy will require additional stimulus, Prime Minister Scott Morrison said on Friday.
To prevent a prolonged economic depression triggered by COVID-19, Australia’s government and central bank has pledged to spend A$250 billion ($166.1 billion).
Much of Australia’s stimulus is expected to expire in September, but Morrison said some additional support may be needed.