Chinese stocks tumble causes dollar selling pressure

The benchmark Shanghai Composite opened down over 4% today, wavering between losses and gains over the course of the early morning session, as investor sentiment remained unstable in spite of a fresh assurance by Beijing to put a floor under the market. The index was down as much as 5.1% indicating that there is seemingly no amnesty to the aggressive selling rocking the country's equities. A sharp slump in commodity prices, weak Chinese economic data and concerns that Beijing may be reluctant to dole out further measures to support beaten-up shares all contributed to the sell-off.

Data released earlier on Monday showed China's industrial profits declined 0.3% year-on-year in June, compared with a 0.6% rise in May. China is a bit self-feeding, commodity prices are falling which is negative for China as an exporter and that's impinging on other investors' views on fundamental demand as China is also a big importer so the market grinds lower.

The Kospi index of stocks halted a two-day drop as shares in China, the largest export market for South Korea, pared losses Tuesday. A gauge of the dollar stayed near the lowest in more than a week before the Federal Reserve starts a two-day meeting to discuss raising borrowing costs. Yuan against dollar was moving in a narrow range.