Fears about China’s economy kept emerging markets under heavy pressure on Wednesday, while the dollar eased as traders waited on minutes from last month’s Federal Reserve meeting for any hints on US rate hike plans.

On another rollercoaster day in Asia, Chinese shares plunged again before ending higher, Vietnam devalued its currency and Japan’s Nikkei took its biggest fall in more than a month.

Europe started with its main equity markets down between 1.1 to 1.6 per cent and safe-haven government bonds back in favour as Germany’s parliament also prepared to vote on Greece’s latest bailout.

The dollar weakened broadly pending the Fed’s minutes and US inflation data that could also signal whether the central bank is on track to raise interest rates next month.

It would be the first rise in almost a decade, but rocky emerging markets and a renewed slump in commodity prices that will drag on inflation is raising doubts about the timing.

“The markets are moving towards what are the Fed going to do: will it be September, will it be December?’’ said Gavin Friend at National Australia Bank in London.

“That said, the thing everybody is watching on a day-to-day basis is the whole EM complex. There are all sorts of wobbles going on in China and the market is all over the place.’’

The Shanghai and Shenzhen markets fell more than 4 per cent early on, but state-backed buyers later in the day enableding both to finish up more than 1.2 per cent.

It is a pattern that has been repeated several times since Beijing’s “national team’’, a coalition of state-backed financial institutions and regulators, went into action early last month with instructions to halt a crash in share prices.

After last week’s devaluation, spot yuan was changing hands at 6.3993 per dollar, slightly weaker than Tuesday’s close of 6.3938.

“We think yesterday’s stock market crash (in China) reinforced yuan depreciation sentiment, which will encourage more capital outflows, necessitating more open market operations and ultimately a reserve requirement ratio cut in the current quarter,’’ strategists at ING wrote.

Good as gold

Oil fell again after its brief bounce on Tuesday, weighed down by prospects of US demand weakening in autumn and the slowdown in Asia’s leading economies.

US crude futures were down 0.6 percent at $42.38 per barrel, edging back towards a 6-1/2-year low of $41.35 struck on Friday. Brent crude was down 0.5 per cent at $48.56 a barrel and in reach of 6-1/2-month troughs.

But copper prices, which had slid to a six-year low of $4,983 a tonne, breaking the psychological $5,000 level, recovered to $5,028.

Gold, one of the few metals to benefit from the EM turmoil, was up a tick at $1,120 an ounce.

Euro-watchers are focussed on how big a rebellion Germany's Angela Merkel will face over another Greek bailout, which nevertheless is expected to get backing.

The euro, helped by the dollar’s dip, traded at $1.1052, having hit a one-week low of $1.1016 on Tuesday. Sterling was steady at 1.5670 while the yen inched up to 124.28 to the dollar.

“Another uptick in the US Consumer Price Index may spark a sell-off in EUR/USD as market participants ramp up bets for a Fed rate hike at the September 17 interest rate decision,’’ said David Song, currency analyst at DailyFX.

“However, the renewed decline in oil prices may drag.’’

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