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MORNING BELL: Currency changes abound

Greece reached a bailout deal with its creditors on Tuesday, boosting Greek Shares and its benchmark index higher. The optimism created by the Greece’s deal helped protect the weaker euro zone debt from a turn to safe-havens after the shocking devaluation from China. The euro has been trading steadily just above $1.1055. In UK news, the Claimant Count Change data and the Average Earnings Index release are due at 08:30 GMT. 

The Chinese Central Bank further weakened the midpoint rate of the yuan by 1.6% early on Wednesday to 6.3306 per dollar. China’s Central Bank stated that given the world-wide and local economic conditions there was no ground for a postponed yuan depreciation. The International Monetary Fund said that this new mechanism for setting the yuan daily reference rate is “a welcome step,” in the sense that market forces should have a bigger impact in establishing the appropriate rate. 

Following China’s yuan devaluation, the US dollar has been trading close to two-month highs against the Japanese yen, while the Australian dollar rolled down to its lowest level since April of 2009. Oil prices also dropped along with yuan’s fall, while Gold is holding near a three-week peak. Coming up on Wednesday are the Crude Oil Inventories at 14:30 GMT and the USDA WASDE report at 16:00 GMT. 

 

 



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