ROME: European stock markets on Thursday rebounded from their worst performance in 2015 after the People’s Bank of China sought to calm fear it was restarting a currency war.
The Stoxx Europe 600 index SXXP, +1.73% jumped 1.5% to 388.64, after Wednesday’s drop of 2.7%, the biggest one-day percentage loss since October.
The sharp decline in the previous session came as China’s central bank roiled the markets by devaluing the yuan USDCNY, +0.1769% for a second straight day, triggering concerns Beijing was planning to lower the currency by as much as 10%. A weaker yuan would provide help for the country’s faltering exports and provide a boost to the economy, which is feared to be slowing down faster than expected.
Chinese bank officials on Thursday, in a rare public defense, called talk that the bank aimed for 10% yuan devaluation “nonsense”.
On Thursday, China devalued the yuan again, but less than expected. Central bank officials assured that the PBOC isn’t trying to start a currency war, stressing that the yuan remains a strong currency based on economic fundamentals.
