China has taken active steps to achieve its GDP targets but taking steps to devalue their currency. There are endless side effects but most interestingly and predictably the ASX is taking a dive.
With the AUD approaching a dangerous .90 mark against the greenback the RBA is getting its wish but for the wrong reasons. A devalued AUD is being driven by diminished demand by China for Australian resources.
Markets across the globe have seen the conversation shift away from Greece to a matter that effects everyone equally. Chinese demand for resources and global real estate and retail is going to hamper the entire global outlook on growth. Most markets are seeing around 6-9% wiped of most indexes and a correction in recently oversold stock. The major indexes are returning to 2009 numbers and the big volumes are maintaining a bearish trend.
China’s fiscal policy is driving madness into markets which have USD debt. The devalued yuan is increasing costs significantly to maintain such and reduces everyones currencies buying power that is pegged against the USD. Further downfalls are expected throughout he week with only few establishments being able to finish in the green.