FXStreet (Edinburgh) – Analyst Jim Reid at Deutsche Bank evaluated the recent move by the PBoC and its impact on the EM FX space.
Key Quotes
“The headlines are dominated again by a material shift in the Yuan fix at the open this morning”.
“The fix was set at 6.3306, a 1.6% devaluation versus the previous days fix and a 0.1% discount to yesterday’s closing level”.
“The Yuan (-1.62%) has plummeted as a result and is on course for its biggest two-day drop (-3.48%) since 1994. The offshore Renminbi meanwhile is down 2.46% in trading this morning”.
“We’ve seen another selloff in FX markets in Asia as a result with the Aussie Dollar (-0.84%), Korean Won (-1.25%), Taiwanese Dollar (-2.25%) and Indonesian Rupiah (-1.57%) a few of the notable movers while the Malaysian Ringgit (-1.38%) has fallen to the lowest level since 1998”.
“We’ve also seen the first sign of a reaction from a Central Bank to China’s moves, with the State Bank of Vietnam this morning announcing a widening in the trading band of its own currency, citing the PBoC action as the reason”.
(Market News Provided by FXstreet)