Global financial markets from the Americas to Asia were roiled by the US Treasury Department’s first move in a quarter of a century to designate China a currency manipulator, after the Chinese central bank let the yuan sink to its lowest level in 11 years in apparent retaliation for US threats of new punitive tariffs on Chinese products. Asia’s stock markets fell across the region for the second day, taking the cue from a 2.9 per cent plunge overnight in the Dow Jones Industrial Average, its biggest one-day decline since Christmas Eve last year.
Stock markets fell from Seoul to Wellington, while Asian currencies weakened. The yuan see-sawed in early-hour trading in the offshore markets, after China’s central bank set the onshore renminbi’s daily fixing at a weaker rate for the fourth day in a row. The US Treasury, which had previously held off labelling Beijing a currency manipulator, made the announcement after US stocks plummeted, the yuan weakened and Beijing announced that it would suspend purchases of US agricultural goods. All three major US stock indices lost around 3 per cent on Monday, putting them where they were a year ago.