Cooler heads finally prevailed in offshore markets overnight with a growing realization that the CNY measures are a catch-up to USD strength against other currencies and could be a long-term positive. To put things in perspective, after all the wild gyrations, AUD/USD is just 0.45% lower from Friday’s New York close. The AUD/CNY monthly chart clearly indicates to what extent the word
‘devaluation’ overstates the CNY move: http://link.reuters.com/qyf45w AUD/CNY has fallen 37% in the four years since 2011. It jumped 51% in a single day when China devalued the yuan in 1994. These moves can be described as revaluations or devaluations. A 5% correction after a 37% drop suggests the CNY decline is really no more than a justified adjustment. “IFR”
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