Euromarkets Accept Strong Pressures
The European markets began today with significant losses as for a second consecutive session the export industry is under the weight of China's decision to proceed with a devaluation of its currency.
The British FTSE 100 index fell by 1.19% at 6,582 points, the German DAX recorded a fall of 1.92% at 11,078 points, and the French CAC 40 moved downward by 1.65% to 5,017 points.
Stoxx 600 index fell by 1.59% at 387.35 points.
On the dashboard, Henkel (OTC:HENOY) fell by 7%, despite the fact that it announced profit increase by 14% in the second quarter. The devaluation of the Chinese currency is expected to affect revenues in the coming quarters.
Also, G4S (COP:G4S) makes losses by 1.8%, after the announcement that the profits of the first quarter amounted weaker than expected, although it increased by 5%.
China proceeded to currency devaluation yesterday, after the release of the alarming data regarding industry and exports. The yuan was devaluated by 2% against the dollar, posting the biggest daily devaluation of the past 20 years.
Australian Dollar Drops Sharply On Yuan Devaluation
The Australian dollar has fallen again after China's second day of currency devaluation affected global markets.
On Wednesday, the currency was trading at $0.7262, down from $0.7316 cents on Tuesday.
The People's Bank of China devalued the yuan against the US dollar for a second consecutive day by 1.62%.
The currency shift had a ripple effect on international markets, with the Australian dollar following most major currencies by plummeting.
CMC Markets chief analyst Ric Spooner said the Australian dollar had 2% in two days amid concerns over the economic health of its largest trading partner.
And he said there was a possibility markets could see more fireworks on Thursday.
"If the yuan continues to be devalued against the US, I would expect the Aussie to also fall," he said.