Key Takeaways
- The Philippine Peso dropped as much as 0.53% to 58.530 per U.S. Dollar, marking the highest level for the dollar in approximately six months, while China's onshore Yuan fell to 7.2039 per Dollar, its lowest level since May 29.
- China's S&P Manufacturing PMI for July registered 49.5, indicating a contraction in the sector and falling below both estimates and the previous month's reading.
- Australia's Producer Price Index (PPI) showed a moderation in inflation, with Q2 figures rising 0.7% quarter-on-quarter and 3.4% year-on-year, both lower than prior periods.
- Geopolitical factors continue to influence markets, highlighted by reports of China's "dark fleet" purchasing Iranian oil in defiance of U.S. sanctions and ongoing trade pressures from the U.S. on countries like India.
Asian currencies are experiencing significant depreciation against the U.S. Dollar, reflecting broader market dynamics and regional economic data. The Philippine Peso weakened by as much as 0.53%, reaching 58.530 per U.S. Dollar, and the dollar climbed 0.4% to 58.456, marking its highest level against the peso in about six months. Similarly, China's onshore Yuan fell to 7.2039 per Dollar, its lowest point since May 29, after opening slightly weaker at 7.2024 from a previous close of 7.1998.
Economic indicators from the region present a mixed picture. China's S&P Manufacturing PMI for July came in at 49.5, below the estimated 50.2 and the previous 50.4, signaling a contraction in the manufacturing sector. Despite this, the China Commerce Ministry announced new tax credit policies aimed at supporting direct investment by foreign investors, a move designed to stabilize and attract capital. In contrast, Malaysian stocks saw a positive trend, rising 0.9% in the latest trading session.
Inflationary pressures in Australia appear to be easing, according to the latest Producer Price Index (PPI) data. The Australia PPI (Q/Q) Q2 rose 0.7%, down from the previous 0.9%, while the year-on-year PPI increased by 3.4%, compared to 3.7% previously. This suggests a moderation in producer-level price increases.
Geopolitical developments and trade policies continue to shape the global economic landscape. A CBS News investigation revealed that China is reportedly using a "dark fleet" to purchase Iranian crude oil, enabling Tehran to circumvent U.S. sanctions. Meanwhile, former President Trump is reported to be pushing India into a corner over trade issues. Conversely, Japan's Kato stated that recent trade deals have helped shield the nation from potential tariff shocks, highlighting the protective role of strategic trade agreements. Domestically in the U.S., Democrats reportedly plan to use the "Rule of Five" to compel the Trump DOJ to release Epstein files by August 15, according to CBS.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.