Despite the best efforts by Beijing to try and defend the yuan, it is on the verge of its lowest levels since November last year against the dollar. And that is indirectly dragging the aussie and kiwi lower today, alongside the more dour mood in equities.
Asian stocks are selling off hard today, largely in part thanks to Chinese equities. The main story as Eamonn pointed out here is the continued trouble and struggle of one of China's top property developer, Country Garden. Oh, how the mighty have fallen. And this wouldn't be the first since the country's real estate sector has landed in hot water in the past few years.
Nonetheless, the Hang Seng is down 2.5% while the Shanghai Composite is down 1.0% on the day. That in turn is leading to a slightly softer mood when viewing general risk sentiment. S&P 500 futures are down 0.2% while Nasdaq futures are down 0.3% on the day.
In FX, the dollar continues to sit in a decent spot with USD/JPY knocking on the door of a break of 145.00 while EUR/USD is threatening its 100-day moving average of 1.0929 currently. And we also have AUD/USD falling below 0.6500 to test its low for the year at 0.6458. If that gives way, it's a slippery slope to 0.6200 next potentially for the pair.
