Topic
China’s central bank shocked markets on 11th August when it devalued its currency, the yuan, by lowering its daily mid-point trading price to 1.87 per cent weaker against the US dollar. A day later, the central bank sent shockwaves again with a second devaluation, pushing down the price by another 1.62 per cent against the US dollar. Fears have mounted of a regional currency war as China’s moves come on the back of the softening of Japan’s yen and the Korean won over the past year. China’s currency devaluation is seen largely as a bid to boost the competitiveness of its exports but is not without implications for its ambition to internationalise the currency and risks triggering capital outflows.
Yuan has wiped off all gains against the US dollar this year, but the currency may bounce back after US dollar loses momentum from its recent rally
Deals settled in yuan hit a new high in July, helped by a surge in usage among Asian economies.
The intense volatility of recent weeks has every chance of remaining the core underlying theme of activity. Investors are increasingly focused the broader question of how this episode might affect the wider economy.
The intense volatility of recent weeks has every chance of remaining the core underlying theme of activity. Investors are increasingly focused the broader question of how this episode might affect the wider economy
