Fears about the Chinese economy sent markets into meltdown yesterday. The Shanghai Composite was down 8.7% which wiped out all of its gains for year.
Stock markets around the world followed suit. London's FTSE 100 index closed down 4.6% at 5,898.87, with major markets in France and Germany down by 5.5% and 4.96% respectively. In total, £73.75bn was wiped off the FTSE 100 as a result of Monday's falls. Wall Street's Dow Jones initially fell 6%, but recovered to trade just 0.8% lower.
Commodity currencies were hit the hardest with AUD, NZD, CAD and ZAR all losing significant ground.
The EUR was up significantly yesterday against both the dollar and the pound as traders bet on interest-rate rises on either side of the Atlantic being delayed due to global market uncertainty.
One major bank pushed out their forecast on the timing of a rate increase from the Federal Reserve to March 2016 from their earlier call of September in the wake of recent volatile market conditions due to anxiety about the Chinese economy.
They state that although economic activity in the U.S. is solid and does justify modest rate hikes, they believe the Federal Reserve is unlikely to begin a hiking cycle in this environment for fear that such a move may further destabilise markets.
EUR - 09:00 :German GDP expected to stay the same at 1.6%
USD -15:00: Markit Services expected to rise to 56 from 55.7.