Yuan Devalues Again Sparking Currency War Rumors

December 10, 2015 Share Print 0

Five months after China shocked the world by devaluing the yuan, sparking widespread fears of a currency war with its Asian neighbors, investors are finding themselves with a case of deja vu.

As the yuan, also called renminbi, trades at four-month low this week, expectations for further deprecation have been resurrected.

The currency weakened for two consecutive sessions amid lower fixings from the central bank. On Thursday, the People’s Bank of China (PBoC) set the official midpoint rate at 6.4236 per dollar, 0.15 percent weaker than the previous fix, prompting the currency to open at its lowest level since August’s 2 percent devaluation..

China’s central bank lets the yuan spot rate rise or fall a maximum of 2 percent against the dollar relative to the official fixing rate.

via CNBC

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Alfonso Esparza

Senior Currency Analyst at Market Pulse

Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.