This archive report was first published on 6 August 2019.
Global markets steadied on Tuesday, August 6, 2019, after a dramatic rout on Monday, as signs emerged that China would not immediately act on its veiled threat to use the value of its currency as a weapon in its trade war with the United States.
Asian markets ended broadly lower, but European markets were mixed at the opening, with futures markets indicating Wall Street would open only modestly lower.
China's central bank, the People's Bank of China, set its daily fixing for the renminbi at a stronger level than many analysts expected, and also announced plans to sell renminbi-denominated bills in Hong Kong, a move that generally puts downward pressure on the currency.
The renminbi, which weakened more than 1 percent on Monday, strengthened modestly during the Asian trading day.
China's central bank defended its handling of the currency, citing the pressure the renminbi has faced to depreciate by investors, who have been motivated by China's slowing economic growth and rising pressure from the trade war with the United States.
The exchange rate, the bank said, 'is determined by market supply and demand, and there is no problem of 'currency manipulation''.
US President Donald Trump declared China to be a currency manipulator on Monday, a move that drew objections from Beijing, which called it 'wayward unilateralism and protectionist behavior that seriously undermines international rules and will have a major impact on global economic finance''.
