US stock futures slipped while Asian equities were mixed as investors weighed trade data which reinforced the slowing momentum in the world’s second-largest economy.
The dollar advanced. The Hang Seng China Enterprises Index fell 1.7%, the worst-performing stock gauge in the region. The greenback gained on concern that China may be relaxing its grip on the yuan, which helps anchor other foreign-exchange rates in Asia.
Treasuries rose. A report by Moody’s Investors Service lowering credit ratings for 10 small and midsize US banks also impacted sentiment, with the rating agency saying it may downgrade major lenders.
China’s exports fell for a third straight month in July amid a slump in global demand, while imports plunged as domestic pressures also undermined the economy’s recovery. The data added to concerns as signs of deflationary pressures continue to hit Chinese businesses amid weakening growth.
The People’s Bank of China set Tuesday’s yuan reference rate at 7.1565 per dollar, revising an earlier fixing in the morning when it had indicated a stronger fixing of 7.1365. The Chinese central bank has been supporting the currency. “The fix above 7.15 certainly allows more room for USD/CNY to rise,” said Fiona Lim, senior FX strategist at Malayan Banking Bhd.
