Moody’s downgrades China’s outlook
Moody's ratings agency downgraded its outlook on China's government credit ratings from stable to negative.
The Australian dollar experienced a 1% decline to $0.6559, retracting from a four-month high established on Monday.
The EUR/USD pair dropped to 1.0835 despite an improved composite PMI at 47.6, its highest since July.
Negative PMI readings from the previous week raise concerns about ongoing contractions in the Eurozone.
On the Market Watch!
Moody's ratings agency has revised its outlook on China's government credit ratings, shifting from stable to negative. The decision was prompted by a decline in medium-term economic growth and the persistent contraction of the property sector.
The shift to a pessimistic outlook reflects mounting indications that financial support may be needed for local governments and state-owned enterprises struggling with substantial debt loads.
The offshore yuan was steady at 7.153 per dollar, as sources indicated significant activity among China's major state-owned banks involved in purchasing the yuan.
The Australian dollar declined 1% to $0.6559, dropping from the four-month high set on Monday. This decrease followed the Reserve Bank of Australia's (RBA) decision to maintain interest rates at 4.35%, a 12-year high as markets expected. The RBA also noted that economic data received since November is aligned with forecasts.
The EUR/USD pair declined to 1.0835. Following the eurozone's composite PMI, which improved to 47.6, marking its highest reading since July, compared to October's near three-year low of 46.5 and exceeding the 47.1 preliminary estimate.
Nonetheless, a substantial set of negative PMI readings last week suggests that the Eurozone is likely to face continued contractions, raising apprehensions about the outlook for the region.