Monday, 6 August 2018
- Asian stocks firmed on Monday, taking cues from Wall Street’s advance in the last session.
- China announced Friday that it would impose tariffs on $60 billion in U.S. goods if the U.S. proceeded with placing more duties on Chinese imports.
- The offshore yuan was steady after firming on Friday when the People’s Bank of China moved to stabilize the currency following recent weakness.
Asian shares advanced early on Monday, taking cues from Wall Street’s gains while trade returned to the fore after another set of tariffs on U.S. goods were announced by China.
The Nikkei 225 edged up by 0.14 percent, the Kospi added 0.44 percent and the S&P/ASX 200 rose 0.44 percent. The Dow Jones Industrial Average rose 0.54 percent, or 136.42 points, to close at 25,462.58 on Friday.
China said it was preparing levies, ranging from 5 percent to 25 percent, on around $60 billion in U.S. imports, including many agriculture-related goods.China said the latest duties would be implemented if the U.S. proceeded to impose more tariffs on Chinese goods.
Wall Street gained on Friday as investors digested the latest jobs data. Nonfarm payrolls rose by 157,000 in July, missing the 190,000 forecast in a Reuters poll, although the broad employment picture remained strong. Average hourly earnings increased 2.7 percent compared to one year ago while last month’s headline jobs number was revised upward to 248,000 from 213,000.
The dollar index, which tracks the greenback against a basket of currencies, firmed to 95.246. The People’s Bank of China (PBOC) set the Yuan reference rate at 6.8513 vs Friday’s close of 6.8288. PBOC reintroduces FX forwards reserve ratio to halt rapid Yuan depreciation. The People’s Bank of China (PBOC) will set a reserve requirement ratio of 20 percent for the financial institutions settling foreign exchange forward yuan positions. The move is set to go into effect today and is aimed at discouraging dollar purchases.
Source : Reuters