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Chinese Equities Experience the Biggest Plunge Since 1995

Tuesday, August 25, 2015 8:16 AM GMT

- Volatile global markets showed tentative signs of a respite from the recent blood-letting on Tuesday as bargain hunters helped Asian stocks off three-year lows, though share markets in China, epicenter of the rout, suffered another big sell-off. Currencies stepped back in Asia on Tuesday.  Also, in the early Asian Tuesday session, the euro slipped 0.7 percent to $1.1531 while the yen retreated to 119.05 to the dollar. (Source: Reuters)

- Traders in the $5.3 trillion-a-day foreign-exchange market were busy Monday. New Zealand’s dollar plunged as much as 8.3 percent, the most in 30 years, pacing declines by currencies of resource-producing nations amid a global market selloff. On the flip side, haven currencies surged on concern China’s slowing economy will damp global growth, with the yen climbing the most since 2010. The U.S. dollar meanwhile suffered as traders pushed out expectations for higher interest rates from the Federal Reserve. Briefly, the euro rallied past $1.17 for the first time since January, while yen climbed as much as 4.7 percent, the most since May 2010, to its strongest this year. Aussie slumped by 3.6% the most in 5 years, while the CAD touched a 5-year low versus USD, before starting to rally. (Source: Bloomberg)

- New Zealand's Finance Minister Bill English: New Zealand economy well placed to handle market volatility. Lower currency will boost profits of many industries. (Source: DailyFx)

- Japan's Akira Amari: Yen seen as safe asset shows valuation of Japan economy, Japan's economic fundamentals are seen as sound..Japan's economy is continuing on recovery trend overall. Finally, he pointed out that '' Not at stage for G-7, G-20 response.'' (Source: ZeroHedge)

- The JPY was the best performing major versus USD Monday with +3.06% spot returns while the NZD was the worst performing with -3.08% returns. (Source: DailyFx)

- USD Fed's Lockhart: ''Yuan, dollar, oil prices all complicate U.S. outlook... Fed will be data dependent.'' Finally, he added that '' expects moderate growth, gradual rising inflation. Still believes rate hikes to start this year. Not using the same language to pump September though.'' (Source: ForexLive)

- SPX and Dow dove into close. You have the people who are panicking and looking for a reason to sell, and the speculators playing the short. Furthermore, SPX volume was somewhat tepid. Emini volume on the other hand was highest in 4 years. More a 'speculator' flushes than 'investor'. More to sell, of course. (Source: FXStreet)

- Societe Generale on EUR/USD, GBP/USD : After testing the lower limit of a triangle earlier this month, EUR/USD has embarked on a sharp rebound, notes SocGen. The move above 1.1536, according to SocGen, means continuation in rebound towards 1.1810/75, weekly channel limit and the 38.2% retracement of the correction since last year highs. Meanwhile, SocGen notes that GBP/USD tested a trend support since May at 1.5350/1.53 and has been undergoing a consolidation. The move above 1.57, according  to SocGen, signals a retest of 1.5950, with July low at 1.5350/1.53 acting now an important support which decides about a deeper correction. (Source: efxnews)

- Emerging Markets Currencies Rundown: USD/ZAR and USD/RUB test record highs amidst panicked markets. Currencies that are exposed to China, where the initial spark of fear emerged last week, have been particularly hard hit. USD/ZAR: All-time high in sight, but potential for a pullback first...while regarding USD/RUB, investors should pay attention to the fact that Oil’s collapse could create record close. (Source: Forex.com)

- HUF was the best performing emerging-market currency vs USD on Monday with +2.61% spot returns while $COP was the worst with -4.01%.  (Source: DailyFx)

- Today’s Upcoming Events:  German GDP, U.S. New Home Sales, U.S. Services. New Zealand Trade Balance, German IFO.

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