Fall in China’s exports and imports hurt risk, yen gains
The safe haven yen strengthened soon after disappointing data from China that showed a decline in the country’s imports in August and this raised concerns of a more severe slowdown in the world’s second largest economy.
Meanwhile, China’s August exports fell less than expected but a steeper slide in imports pointed to continuing economic weakness, adding to concerns over the health of the economy, a day after foreign exchange reserves numbers revealed accelerating outflows.
The weak data raised speculation of more policy easing in the coming months such as a further cut in the reserve requirement ratio and a chance of interest rate cuts.
The dollar lost some gains versus the yen, after rising to 119.54 it fell to 118.35.
The euro stood little changed at $1.11670 before jumping late in the Asian session to 1.1222.
Malaysia’s ringgit fell to fresh 17-year lows while the Indonesian rupiah slid towards 14,500 – levels not seen since the Asian financial crisis, both under pressure because of relatively limited foreign currency reserves.
Oil prices fell more than 3 percent on Monday as the drop in Chinese share prices and record North Sea production added to global oversupply concerns.
Brent crude futures rose 0.7 percent to $47.94 after a 3.7 percent fall on Monday. They still traded below the 50 percent retracement of their rally late August to $54.32 from 1/2-year low of $42.23.
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