European and the U.S. stocks clawed right back up after recent losses following China’s move for stabilization of its currency. This provided a respite to the investors who were stung by the escalation noted in the trade tensions.
The Index for S&P 500 advanced while the manufacturing shares took the Stoxx Europe 600 to a higher scale as China happened to fix its Yuan currency at a margin stronger than the exchange rate of 7 Yuan for each dollar. This level spurred off a globally acknowledged sell-off on Monday. Monday’s gains allowed a steady rise for dollar as well as gold while the Treasuries gave some back during 5th August surge.
China’s move for stabilization of Yuan also offered a sense of reassurance to the fact that trade conflict amid world’s largest economies can be contained. However, this came hours post the designation stamped by the U.S. for China as a currency manipulator. This was a move which could open up doors to fresh penalties atop the current tariff hikes which were already imposed upon the use of Chinese goods. On its part, the Chinese democrats mentioned that recent depreciation of Yuan was actually decided by local market and not Beijing. This was a direct denial of accusation placed by Trump administration.