Back in March, Asian Development Bank chief economist Wei Shang-Jin said: "It is time to ask whether the [yuan] has become overvalued relative to fundamentals."

Then in its July 7 staff report published on August 14, the International Monetary Fund wrote: "The substantial appreciation of the [yuan] in real effective terms this year has brought the exchange rate to a level that is no longer undervalued."

Yet Beijing's policy moves have not made the Fed's decision, on the timing of a US rate rise, any easier.

No one knows if the US central bank will now hold fire on raising rates next month for fear that a weaker yuan, through now-cheaper Chinese exports, will translate into disinflationary pressures within the US, but some are already arguing that to do so could leave the Fed exposed.

"I think this would put [the Fed] in an awkward spot to use this as an excuse" for holding fire, former Dallas Fed chief Richard Fisher said.

Could China's decisions on the yuan, counterintuitively, force the Fed's hand?

The Fed will certainly need to mull whether its own window of opportunity to raise rates, based on currently broadly supportive US data, might be short if China's slowdown is reflective of broader economic headwinds.

And as the Bank for International Settlements emphasised more generally in June, if rates are not raised, how can they subsequently be cut if needed?

"Restoring more normal [monetary] conditions will also be essential for facing the next recession, which will no doubt materialise at some point. Of what use is a gun with no bullets left?" the BIS said, a concept the Fed will undoubtedly be familiar with.

All this is occurring with US dollar credit to non-banks in emerging market economies having "almost doubled since early 2009, to exceed US$3 trillion", according to the BIS.

The world needs dollars to pay off its debt and those greenbacks become dearer in local terms if Asian currencies depreciate in order to preserve a competitive position against a weaker yuan, and become even more expensive if the Fed raises rates.

The dollar is therefore just another commodity, so if a buyer thinks the price of a greenback will be higher tomorrow, it is logical to make the purchase today even if it means the notion that the dollar will rise in value becomes self-fulfilling.

Meanwhile, although "[emerging market economies] are in better shape than in the 1980s and 1990s … foreign-exchange exposures are now concentrated in the corporate sector, where currency mismatches are harder to measure. There are limits to how far official reserves can be mobilised to plug private-sector funding liquidity shortfalls or defend currencies", the BIS said.

That assertion has arguably been illustrated recently in the ringgit's fall in value with Malaysia's central bank withdrawing from the fray awhile rather than keep selling foreign reserves to resist the currency's slide.

Vietnam only waited one day after China's initial near 2 per cent devaluation of the yuan before opting to widen the trading band for interbank dollar-dong transactions to 2 per cent from 1 per cent.

The Bank of Korea may have kept interest rates unchanged on August 13 but noted the risk of the global economy "being affected by heightened international financial market volatility due to a shift in the Fed's monetary policy and the devaluation of the yuan".

On August 14, Taiwan slashed its forecast for gross domestic product growth this year to 1.56 per cent from the 3.38 per cent predicted in May.

Asia seems caught between China on one side and the Fed on the other. There are no compelling reasons yet to suggest the worst is over for Asian currencies and there is every possibility that their downbound train journey continues.