Every major currency trading was down sharply during the day yesterday against the US dollar and the Japanese yen. In the absence of us economic data yesterday, the price movements in the Forex market are derived from concerns that emerged on China. Is expected to continue the health of the world's second-largest economy to dominate the financial flows in the Forex market today, the basic story focus today is rise in non-performing loans in China but in the path gives focus to the industrial sector in China, where merchants wait as a result of China's industrial purchasing managers index released by HSBC. Traders said that weakness of these data, the loss of the Australian dollar and other currencies high risk may increase rapidly. Although there was American economic data today, but China was the most important in the Forex market and more influential on the rates of risk appetite.
Affected by high risk currencies as safe haven currencies performed well after the news came that China now has three times the non-performing loans in the first half of the year. Traders believed that increasing these loans in the Seine is a red flag for Asia's largest economy, while this shows that China has deeper problems, the write-off of bad debts is part of a new Government strategy to clean up their records and to make disability rates at international standards. Instead, we believe that the risk of sale may be the source of the Chinese Bank's decision is the infusion of liquidity in China's financial system for the second time since July 30. In General, the Chinese central bank liquidity pumped twice a week but it might discourage capital inflows in the last month of the adoption of the resolution this week. As a result of this increased interest rate for seven days by more than 100 basis points to 4.5 percent before settling at 4.05%. The reduction of liquidity at a time when the world is watching China's economic growth rate has caused downward pressure on Asian stocks and risk appetite and riskier currencies.
But with the profitability standard the biggest lenders in China, they can now hold up to balarbh yen and can avoid selling stock intensive Chinese. There is no doubt that the slower rate of growth has increased the amount of bankruptcy and failed companies in China, but China's Government also is pressing banks to write off some of its debts to avoid increasing the loan later. At the end of trading yesterday, this mechanism will help Chinese banks to improve their situations, but in the near future, the Chinese banks more money to write off bad debts, it will reduce the liquidity and this result will not be good for riskier currencies.
