LONDON, Aug 6 (AFP): Global stock markets breathed a sigh of relief on Tuesday after Beijing appeared to de-escalate a conflict with the US over the level of its currency.
Equities had tumbled Monday, with the biggest losses seen on Wall Street -- in what analyst Fawad Razaqzada at Forex.com called "a bloodbath" -- after China allowed the yuan to slide against the dollar, effectively weaponizing the currency as a riposte to a new round of US tariffs on Chinese goods.
Tensions have escalated since last week, when US President Donald Trump announced fresh tariffs on Chinese goods from September 1 that would subject virtually all of the $660 billion in annual merchandise trade between the two economies to punitive duties.
The yuan's slump fuelled speculation that Beijing is allowing its currency to devalue to support exporters and offset Trump's threat to hit $300 billion in Chinese goods with 10 percent tariffs.
-Escalation? 'Not just yet'-
But on Tuesday, investors relaxed somewhat after the People's Bank of China fixed the yuan at a higher level against the dollar than analysts had expected, signalling a degree of detente after Washington slapped the "currency manipulator" label on China.
Global stocks feel relief as China de-escalates currency spat
FE Team | Published: August 06, 2019 23:38:53
Global stocks feel relief as China de-escalates currency spat
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