Will the decline in the Chinese market affect European currencies?

Will the decline in the Chinese market affect European currencies?

28.07.2021

Yesterday, the three major U.S. stock indices all fell, creating a risk-off sentiment characterized by falling stock prices, lower interest rates, and cheaper crude oil. In addition to the U.S. market, the Chinese market also saw a sharp decline. The Hong Kong Hang Seng Index fell by about 5% on concerns over tighter regulations imposed by Chinese authorities on the IT and education sectors. The yield on the 10-year U.S. Treasury note remained unchanged at 1.24%.The fear index (VIX) rose by more than 10% to 19.3.

With the 10-year U.S. Treasury yield facing resistance, the U.S. dollar is also struggling to gain traction. The EUR/USD pair has been rising since yesterday’s European session, rebounding by about 70 pips from 1.177 to 1.184. Following yesterday’s rally, the EUR/USD is approaching its 20-day moving average, and we are now at a stage where we need to assess whether today’s daily close will signal a return to an upward trend.

Today, at 3:00 PM, the German GfK Consumer Confidence Index and German Import Price Index, as well as UK Nationwide House Price Index, will be released; at 3:45 PM, the French Consumer Confidence Index; at 8:00 PM, the US MBA Mortgage Applications Index; at 9:30 PM, the Canadian Consumer Price Index and US Wholesale Inventories;at 11:30 PM, the U.S. Weekly Crude Oil Inventories; at 3:00 AM, the U.S. FOMC policy rate decision and statement; and at 3:30 AM, a press conference by U.S. Federal Reserve Chair Powell. We will be watching closely to see if European markets, which have been affected by the decline in Chinese markets, can maintain their momentum following today’s economic releases.

Past Market Reports

1. 20.04.2026New

   With the euro-Australian dollar pair hitting new lows this month, attention is turning to how much further it might fall

2. 17.04.2026New

   Will the market wait and see how much further the U.S. dollar can rise against the yen?

3. 16.04.2026New

   Will the weakening Swiss franc recover? Attention is turning to price movements during European trading hours.

4. 15.04.2026New

   Market participants are likely keeping a close eye on the upside potential of the euro, which has risen against the U.S. dollar

5. 14.04.2026New

   Should we keep an eye on remarks by key figures in the U.S. and try to gauge the direction of currency strength?

6. 13.04.2026

   Market participants are likely watching for signs of a rebound in the Canadian dollar, which fell against the U.S. dollar following the release of employment figures

7. 10.04.2026

   Will the weakening Swiss franc continue to strengthen against the yen, or should we wait and see?

8. 09.04.2026

   Will the U.S. dollar, which has fallen against the yen, continue its downward slide, or should we wait and see how the market moves?

9. 08.04.2026

   Should we keep an eye on the upside for European currencies that have risen against the U.S. dollar?

10. 07.04.2026

    Market participants may be wary of further downside potential for the U.S. dollar, which has weakened amid concerns over the situation in Iran