Global markets rally as China set to end fixed peg

Asia stocks, US stock index futures and commodities rose as the dollar weakened after China signaled it would loosen the renminbi’s 23-month fixed peg and allow for more flexibility, Bloomberg reported. On Monday morning, the MSCI Asia Pacific Index surged 1.8% to 118.25, Standard & Poor’s 500 Index futures increased 1.3%, and copper and oil prices for three-month delivery rose 1.3%. Meanwhile, the dollar depreciated compared to 15 of its 16 most-traded currencies. China’s trading partners have long complained the fixed exchange rate of RMB 6.83 to the dollar was an unfair subsidy for China’s exporters. The end of the fixed peg is expected to boost demand for nations seeking to sell products to China. The People’s Bank of China made the currency announcement on Saturday, June 19 at 7 p.m. Beijing time on its website, just a week before G20 leaders are set to meet in Toronto.