Stocks in Asia traded mostly higher on Monday as investors monitored the yuan’s movement after the People’s Bank of China announced a new regulation to make it easier to short its currency.
As of 9:15 local time in Thailand (GMT+7), Nikkei dropped 0.25%, SSEC rose 1.59%, HSI increased 1.49%, ASX 200 gained 0.21% and Kospi advanced 0.56%.
During the previous weekend, the Chinese central bank announced that financial institutions now no longer need to set a cash-provision when conducting foreign exchange forwards trading, effectively Monday, October 12, 2020, onwards.
The move made it easier for financial institutions as the institutions previously required to set aside 20% of the previous month’s yuan forwards settlement amount as foreign exchange risk reserves.
Meanwhile, Tisco Securities expected the buying pressure to slow down in today’s session due to a holiday tomorrow and a pro-democracy protest gathering on October 14 that continued to weigh the market down. Moreover, the market is expecting the banking sector to report better performance than the previous quarter, but still, lower when compared to the same period last year. There is also anticipation of whether the banks would require more provision as the coronavirus pandemic is still tormenting the global economy.