| Online: | |
| Visits: | |
| Stories: |
How the Dollar’s Rise Led to China’s Yuan Devaluation
Yuan is second-best-performing emerging-market currency over 12 months
by William Watts
Market Watch
China won’t win any friends in Washington with its decision to devalue its yuan currency. But it was a long-running dollar rally that sowed the seeds of the surprise move that shocked global financial markets on Tuesday.
China has tightly managed the value of its currency by setting a daily rate for the yuan versus the dollar. Traders can push the yuan up or down 2% each day. Previously, China had often ignored the market when it set the daily rate, sometimes pushing it higher than would be the case were it taking its cues from the market.
That changed Tuesday, with the People’s Bank of China announcing it will now let the previous day’s trading session set the tone. That realignment was credited with the 1.9% drop in the yuan’s value versus the dollar Tuesday.
Continue Reading at MarketWatch.com…
Source: http://financialsurvivalnetwork.com/2015/08/how-the-dollars-rise-led-to-chinas-yuan-devaluation/?utm_source=rss&utm_medium=rss&utm_campaign=how-the-dollars-rise-led-to-chinas-yuan-devaluation
