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June 28, 2018 06:38 PM | Business

Weakness in Chinese currency dragging Asian FX markets down, says ThomasLloyd

Weakness in Chinese currency is dragging Asian FX markets down, said Nick Parsons, Head of Research & Strategy, ThomasLloyd.

Speaking to CNBC-TV18, Parsons said Chinese are allowing or encouraging its currency to depreciate in retaliation to what US President Donald Trump is announcing.

According to Parsons, rupee is not at 69 to the dollar because of specific worries about India. But rupee is weak, because in the last five days, Renminbi has fallen by almost 2 percent and the dollar against Chinese currency was 6.40 just ten days ago and is at 6.62 today.

Parsons said the third quarter could be marked by another bout of volatility in global assets markets and he wouldn’t be surprised if investors took risk off the table in both the developed and the emerging markets.

With regards to crude oil, he said at the level of mid-70s, it starts to cause a lot of concern consumers globally and it's unlikely to go much beyond the high-70’s, because the producers would likely increase supply.

On the Sensex, he said, there is a potential for extended pullback, just below 34,000, where the 200-day average of 33,900 lies and its 100-day average is 34,450. So, a bit cautious on the market now.
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