China blinks first. Recovery of American Shares - HailNewsUp.com: provides the latest news from India and the world

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Tuesday, August 6, 2019

China blinks first. Recovery of American Shares

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The Dow futures gained momentum on Tuesday morning after steps were taken by China to ease the runaway currency war with the United States.

China set the yuan's reference price at 6.9683 per dollar, a hair above the 7: 1 target ratio relative to the US dollar. Although it was the weakest level for the yuan in 11 years, many Wall Street investors feared that China would keep the yuan price below that 7: 1 psychological barrier.

Yuan, which trade more independently outside China, continues to fall under the barrier of the open market (7.07 dollars), but investors were still encouraged that the loss was not much worse.

Stock futures also gained momentum after the Chinese central bank announced plans to issue 30 billion yuan central bank notes next week. It supported the Chinese currency, which fell slightly against the dollar after the announcement.

Futures erased the previous fall of 600 points. Stock futures initially fell on Monday night after the United States qualified China as a currency handler.

Investors feared the label would end China's impetus to keep the yuan above the 7: 1 dollar ratio, which triggered a currency war with the United States. A new devaluation of Yuan can reduce the burden of US tariff on China. Wall Street fears that a sharp fall in the yuan could intensify the trade war, causing the United States to increase its tariffs on China.

Dow Futures (INDE) estimated that the market would open slightly more. S&P 500 (SPX) futures rose 0.8% and Nasdaq (COMP) futures rose 0.9%.

American stock recorded Monday's worst day of 2019, in which Dow fell 767 points. Nasdaq was most affected because the increase in the commercial war would affect technical actions particularly.

European stocks were somewhat cured on Tuesday, and Asian stocks were slightly lower