Fed Hit Sees the Dollar Fall and China Stocks Dramatically Plunge

In overnight trading there was a sharp decline in the price of many China stocks, with Hong Kong also seeing a lot of shares across the board dropping in price following recent rises that had led to the government giving warnings, saying that they believed prices were running away.

The dollar continued to see losses following the release of the latest Federal Reserve meeting minutes which gave indications that there are divisions within the Federal Reserve concerning what path should be taken in the future when it comes to monetary policy in the United States.

In what is the biggest fall since December last, the Shanghai Composite Index got hit hard just in advance of Thanksgiving. It saw a drop of 2.57% before rebounding slightly. For a number of weeks now investors in China have been somewhat rattled due to a rout in the bond market, as well as many being concerned over the government’s attempts to reign in a stock market that has been surging in recent times,

Following rallies, oil and gold were also down and now the U.S. has been closed down for the holiday that is Thanksgiving, as well as Japan also being shut down. The MSCI  Asia Pacific Ex Japan Index closed down.

Further details emerged about the recent meeting of the Fed, with the minutes highlighting how a few of the key policymakers voiced their concerns regarding soft inflation whereas others believed that the increase in the near-term rates was needed.

Despite this drop, it still seems that equities are going to finish out the year close to all-time highs and in general the stock market investors are optimistic about company earnings and global growth in general in what has been a good year for most investors.

Turning back to Asia news, there were positive signs in Singapore as they have increased their forecast of growth for this year, which underlines the recent good performances in the South East Asia economies. This comes after there was encouraging 3rd quarter data coming from the likes of Thailand, Malaysia and the Philippines, all of whom managed to surpass forecasts.

With the dollar dropping somewhat, it saw the yen hold its 9-week high against the American currency. Despite continued political divisions in Germany, the euro continued to hold onto their gains.

At the moment in Germany, the party of the chancellor Angela Merkel have been in talks with the Social Democrats to renew their alliance so they can avoid the risk of another election. This comes after both parties had seen their coalition talks break down in Berlin, something that will concern the higher-ups in both parties, as well as investors in the Eurozone as a whole.

The minutes from the European Central Bank’s most recent meeting in October are set to be released today and they are set to showcase the discussions these policy makers had with regards to tapering in Europe.

There are also consumer confidence figures due out for both South Korea and New Zealand trade for the month of October.

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