Australian Investment Blog

The Peoples Bank of China (PBOC) Stopped the Markets in their Tracks

Yesterday, the Chinese Government devalued their currency, Yuan 1.9% against the $US, reversing the positive sentiment in many markets of the previous day. Markets illustrated clearly how fragile they’re psychology is at present, by focusing on concerns that the world’s second largest economy is headed for a deeper slowdown, as opposed to considering that the Chinese Government intends to increase stimulation to maintain economic growth. Analysts are now guessing whether China is preparing to enter a currency war, or to eventually let the Yuan float freely like other currencies. – We believe the latter is the eventual outcome.