Asian Currencies and Stocks Drop in Massive Selloff

Asian equities and currencies fell as worries about rising US interest rates and tensions in the Middle East combined with signals that China’s economy was losing steam.

Every major market saw losses as the MSCI Asia Pacific Index fell to its lowest level since August. This was due to a number of China’s economic statistics indicating that the country’s recovery from economic hardship is still uneven. Following strong retail sales figures overnight, the S&P 500 sank more than 1% in a tumultuous session, and futures contracts for US and European shares declined in Asian trading.

A global indicator of emerging market currencies declined, with the Indonesian rupiah and the South Korean won falling to multi-year lows. Additionally, traders attributed the region-wide selloff to the yuan’s decline after China unexpectedly reduced its defences, moving towards a policy red line due to a rising dollar and unfavourable sentiment.