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European equities edged down on Friday after Asian indices gained mainly in yuan and trade uncertainty continued to weigh on world markets.
The Stoxx Europe 600 was down 0.1% early in the morning.
The Shanghai Composite Index and Hong Kong's Hang Seng both rose 2% and 0.6%, respectively. The Japanese yuan fell by 0.3%
. The Chinese yuan reached its one – year loonie against the dollar on Friday after Beijing lowered its official rate of 0.9% to 6.7671 per dollar, the largest decline in two years. The currency fell 2.3% against the dollar in July
A falling Yuan makes Chinese exports cheaper for foreign buyers, but the growing protectionism in the world could limit the ability of exporting companies to draw fully profit. The weaker yuan also makes it harder for Chinese companies to service dollar-denominated debt.
"Uncertainty continues to weigh on the markets at the moment, as the trade situation is still unpredictable as much as possible, but it becomes much more difficult to ignore the movements of the Chinese currency in the face of a possible currency war,
German Bank
wrote in a note Friday.
The recent fall of the yuan has prompted criticism from the president
Donald Trump,
who said Thursday in an interview that the rise in interest rates and a stronger dollar are putting the United States at a disadvantage. The comments depart from an agreement in which US presidents refrain from expressing their views on the dollar and monetary policy.
10-year US Treasuries yields fell slightly to 2.843% on Thursday from 2.845% on Thursday. Yields are falling as prices rise. The WSJ Dollar Index, which measures the currency against a basket of 16 others, remained stable.
In raw materials, Brent, the world benchmark for oil prices, gained 0.9% to 73.20 dollars a barrel. Gold fell 0.1% to $ 1,223.40 an ounce.
Write to Ben St. Clair at [email protected]
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