China’s yuan tanks amid fears on foreign selloff


This comes amid fears that foreign capital will flow out from the Chinese stock market
Newsfeed28 Jul 2021
Photo credit: AFP Photo


China’s government bonds and the yuan slid in tandem, amid speculation that overseas hedge funds have stepped up liquidating the country’s assets after a rout in shares deepened.

The yield on the most actively traded 10Y government bond rose 7 bps to 2.94% Tuesday (27 July) afternoon, the most since in a year. The offshore yuan fell as much as 0.6% to 6.52 per dollar, through the key 6.5 level for the first time since April. Stock benchmarks in China and Hong Kong extended declines, with the Hang Seng Index plunging as much as 5.5%.

Risk aversion has emerged in China after a sudden policy change on education companies followed crackdowns on technology firms, raising concerns on a swathe of sectors in the equity markets. Curbs in financing for the property sector, and signs of an expanding Covid-19 outbreak are also weighing on growth expectations. – Bloomberg News.

The US Dollar Index fell 0.23% to 92.432, the euro gained 0.12% to USD1.1817, the pound rose 0.44% to USD1.3879, and the yen strengthened 0.55% to 109.78 per dollar.

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