Renminbi devaluation continues

August 12, 2015

The renminbi has been one of the most highly controlled currencies in FX and had a quasi-peg against the dollar for some time, but just as we saw from the Swiss National Bank earlier in the year, when economic conditions shift, action has to be taken to adjust the value of a currency to take it to a fairer value. Such moves are usually in the interest of your own domestic economy and since China has been slowing rapidly for years against the backdrop of a slower global economy, it’s little wonder the data has been disappointing and the PBOC has been upping the ante on the monetary stimulus front. These fundamentals would cause any free floating currency to fall in value, so it should not come as a surprise to see the devaluation occurring and further weakness could follow as China attempts to give provide its exporters with a more competitive environment. This move is impacting risk assets due to the unpredictability of the PBOC’s action and as it will have a knock on deflationary impact for China’s big trading partners. The FTSE 100 is due to open lower by some 50 points and at the time of writing the Dow Jones is being called to open over 100 points in the red as companies that are reliant on revenues from China will be shunned by investors for the second day in a row.

Whilst the headlines and focus is on China this morning we must also give attention to the UK where unemployment data is due to be released at 9.30 UK time. The unemployment rate is due to remain unchanged at 5.6% and average earnings remain at 2.8%, where anything stronger could give sterling a lift following some recent weakness especially against the euro.

Publication source
FxPro information  FxPro reviews

December 7, 2016
Will ECB support Italy?
The yield of the Italian sovereign debt fell on Tuesday as the focus moved to the political uncertainty on the market. After Renzi’s crash on the weekend and the expectations of the ECB measures to deal with the possible fallout of the financial markets...
December 7, 2016
WTI bears on the prowl
WTI Crude was vulnerable to sharp losses on Tuesday following reports of OPEC output rising to a worrying record high of 34.19 million barrels per day in November which revived the oversupply concerns
December 7, 2016
CAD claws back ground
The Canadian dollar has finally managed to gain some ground against the strong USD after weeks of the market waiting for it to react to oil prices beginning to show some turn after the recent OPEC agreements...

EXNESS Rating
FOREX.com Rating
OANDA Rating
Z.com Trade Rating
Tickmill Rating
 FXTM Rating

Beeoptions Rating
TopOption Rating
Grand Option Rating
Anyoption Rating
TropicalTrade Rating
IQ Option Rating