News 3 Must Read Asian Market Stories
3 Must Read Asian Market Stories: Bitcoin Soars, What’s Up With The Yuan, and Why China’s Offshore M&A Has Cooled
While global stock markets look wobbly, digital currency Bitcoin continues to power to new highs.
Bitcoin, in which trading volume is dominated by the Chinese, rose to around $1,875 overnight, with analysts ascribing the surge to investors seeking a hedge against political turmoil. CNBC has a good story looking at growing demand for the crypto-currency beyond China:
To be sure, some investors would not consider a volatile asset like bitcoin a “safe haven,” but Kelly and others believe the digital currency has a chance at challenging gold as a go-to safe store of value in turbulent times. Gold futures are up almost 2 percent in the last one week.
Other factors driving bitcoin’s price higher included increased demand from Japan and South Korea. Bitcoin trade volume in both country’s currencies rose slightly from prior days, bringing Japan’s share to about 40 percent, up from near 36 percent, and South Korea’s to about 5.6 percent from roughly 5 percent, according to CryptoCompare.
While digital currencies are soaring, investors shouldn’t forget about the world of fiat currencies. China’s currency continues to be a hotly debated issue in global trade as to whether its undervalued or overvalued.
However, Beijing’s use of a daily fixing for the currency has come in sharpened focus given the stronger than expected fixings this month.
Bloomberg has done a great job explaining what the People’s Bank of China is up to:
China has an insurance policy against a full-scale market meltdown: the daily currency fixing.
With stocks and bonds in retreat amid anxiety over Beijing’s deleveraging campaign, officials have been guiding the yuan higher against the dollar.
After meeting expectations earlier in the year, the reference rate used by the People’s Bank of China to manage the yuan has come in stronger than the forecasts of four banks who regularly track the measure on 24 of the past 31 trading days.