FX Daily Update: Chinese Stock Markets Rebound
The National Bank of Canada | Jul 09, 2015 10:48AM ET
This morning the Shanghai Composite Index is reclaiming part of the ground it had lost recently, but it is still in a major deficit position when considering recent weeks. To avoid a disaster, more than 1,400 Chinese companies requested that trading on their securities be suspended, the Chinese government froze plans for new IPOs and brokerage firms committed to carrying out massive purchases of Chinese stocks. All these measures are not enough, so the Chinese government has now forbidden shorting by the major shareholders of companies. It is becoming clear that the stock market correction will impact the second-biggest economy in the world. There is panic everywhere and the management of a market economy seems to be a major challenge for the Chinese government at this time.
Greece is slated to submit its reform plan today, and Greece's new Finance Minister Euclid Tsakalotos announced yesterday that banks will now remain closed through Monday. We will now see if a new bailout package will be given to Greece to keep it in the eurozone or if European leaders will opt for the gentle version of a Grexit.
Range of the day: 1.2650 - 1.2750
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