China’s slowdown comes at a particularly sensitive time for emerging markets as expectations that the U.S. Federal Reserve will end nearly a decade of its zero interest rates soon have gained momentum in recent weeks, dealing a further blow to emerging market currencies and commodities.
Malaysia’s ringgitt MYR= hit at a 17-year low as its foreign exchange reserves fell below the $100 billion mark while leveraged funds have increased their short bets on other commodity-linked currencies such as the Canadian dollar and the Australian dollar in recent days.
Recent data have confirmed the economic recovery underway in the United States.
The U.S. Department of Labor said on Friday employers added 215,000 jobs in July, only slightly below a Reuters poll while the unemployment rate held at a seven-year low of 5.3 percent, with signs that wages were beginning to pick up.
On Wall Street the Dow Jones industrial average .DJI fell 0.3 percent, hitting a six-month low. The S&P 500 .SPX shed also about 0.3 percent.
Prospects of higher U.S. interest rates have made the dollar more attractive to investors with the U.S. dollar index .DXY, which tracks the greenback’s performance versus a basket of currencies, rising after the U.S. jobs data o 98.334, its highest since late April, before turning lower. On Monday, it stood at 97.670.
The euro traded at $1.0957 EUR= while the yen was 124.35 to the dollar.
Oil prices kept sliding on the global slowdown, a U.S. gasoline glut and a rise in the U.S. oil rig count.
Crude futures prices fell to fresh multi-month lows early on Monday. Brent LCOc1 fell to $48.26 per barrel, not far from a six-year low of $45.19 hit in January.
The 19-commodity Thomson Reuters/Core Commodity CRB Index plumbed fresh lows not seen since 2003 with a year-to-date decline of nearly 14 percent.
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