Germany's DAX rebounds from China hit
Aug 17, 2015 Following the decline in the Chinese Yuan that rocked the global money market, European shares have bounced back after a four-percent fall.
Fidel Helmer, a stock trader from Hauck & Aufhaeuser, said that Germany’s DAX index was up 1.15 percent to 11,048 points and that traders were hoping that the Yuan will stop its downward spiral.
“The most important thing in this week was the devaluation of the Chinese currency, which puts a lot of pressure on the market. Today there is a bit of relief. The Chinese have said they are finished with the devaluation and we have to see if this is true but that is what has been keeping us busy this week,” Fidel said.
European equities hit their lowest level in a month after China allowed its currency to fall, but after the Chinese central bank set a midpoint for the currency that was not as low as expected, stock traders have expressed optimism over the future of the currency.
Germany, however will face a huge economic problem should the trend continue and Helmer went on to explain:
“As an export nation, and with China as the most important trade partner for German industrial companies, you can see that the economy there is weakening slightly. We are worried that it could make a big dent in China, and that the demand from China is no longer big enough which would then have an effect on the climate here,” he said.
The German financial sector recently came under the spotlight when seven employees and one former employee of a major Frankfurt-based bank were linked with a suspected tax fraud investigation and Helmer commented on that saying:
“It is difficult to assess from the outside when there will be a change in the working culture at the Deutsche Bank, but now with the arrival of the new chairman of the board and the departure of Anshu Jain – and there were a lot of errors during his time “in office” – I could imagine that the Deutsche Bank will find its feet again slowly and will be able to put into place the announced change in the working culture,”