Euro-area growth misses expectations, the yuan rises, and the Greek government passes its third bailout package. Here are some of the things that people in markets are talking about today.
The Chinese yuan rose for the first time since Tuesday’s devaluation. The fallout in Asian currencies continued though, with the Malaysian ringgit falling to 4.085 per dollar, its lowest level since 1998, and down almost 4 percent for the week. Chinese stocks, meanwhile, have been rising amid speculation the devaluation will help shore up growth in the economy. The Shanghai Composite Index closed 5.9 percent higher for the week, which was its best one-week performance in two months.
Oil’s slump continues
Oil is headed for its longest run of weekly declines since January as the global supply glut shows no signs of easing soon. Prices have dropped 4.3 percent since August 7 and are down 30 percent since June’s closing high. West Texas Intermediate for September delivery was trading just below $42 on the New York Mercantile Exchange at 11:00 a.m. London Time.
Economic growth in the euro-area slowed to 0.3 percent in the second quarter, which was below economist expectations for a 0.4 percent increase. The slowdown was driven by a sluggish expansion in Germany and Italy, plus a failure to produce any growth at all in France.
The Greek parliament has approved the country’s third rescue package following a marathon overnight session. Prime Minister Alexis Tsipras had to rely on opposition votes to secure the majority needed. He will call a confidence vote later in the month following multiple defections by members of his Syriza party. Euro-area finance ministers are due to meet in Brussels later today to discuss political backing for the package, which would give Greece access to as much as €86 billion ($96 billion).
The Turkish lira has fallen to a record low against the U.S. dollar following the breakdown of talks aimed at forming a new government, leaving a new election as the only way forward. The Turkish central bank, in an effort to stem the collapse, has lowered the cost of dollar borrowing for the fourth time this year. The governor of the bank, Erdem Basci, is due to announce the monthly benchmark interest rate decision next Tuesday.
About Craig Erlam
Based in London, England, Craig Erlam joined OANDAin 2015 as a Market Analyst. With more than five years’ experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic research. He has been published by The Financial Times, Reuters, the BBC and The Telegraph, and he also appears regularly as a guest commentator on Bloomberg TV, CNBC, FOX Business and BNN. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.