Renminbi weakens to new 11-year low, Asia stocks steady

China’s renminbi weakened to a new 11-year low on Friday while stock markets in Asia were in a holding pattern awaiting further pointers from a meeting of global central bankers.

The onshore renminbi, which is permitted to trade 2 per cent either side of a daily mid point set by the country’s central bank, weakened 0.2 per cent to its lowest since March 2008. The People’s Bank of China allowed the currency to weaken past the Rmb7 to the dollar level in early August, sparking a further escalation in trade tensions and for the US to brand the country a currency manipulator.

The less-regulated offshore renminbi, meanwhile, weakened 0.2 per cent to its lowest in more than a week.

“While US-China trade tension remains a key focus for markets, the reality is that a trade deal is unlikely anytime soon and the risk of escalation remains,” Khoon Goh, haid of Asia research said in a note. 

Elsewhere in currencies, the dollar index, a measure of the greenback against a basket of peers, was 0.1 per cent stronger while the pound hovered at three-week high after comments from European leaders on Brexit were viewed positively.

Asia-Pacific equities notched modest gains, with Japan’s Topix, the Hang Seng index and the S&P/ASX 200 all gaining 0.2 per cent. Mainland China’s CSI 300 was up 0.4 per cent.

Overnight, the S&P 500 nudged up 0.1 per cent after a survey of domestic manufacturing added to fears of slowing growth and as Federal Reserve officials suggested they would not back further rate cuts in September, as many market watchers had hoped.

Jay Powell, Fed chairman will speak at the meeting of global central bankers in Jackson Hole, Wyoming, later on Friday.

Coming up

  • Singapore consumer prices
  • Austria industrial production

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Markets Briefing is a concise look at global markets, updated throughout the trading day by Financial Times journalists in Hong Kong, New York and London. Feedback? Write in the comments below or send us an email.


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