From FT Alphaville:
Uh oh . . .Here we go again?
With Elon Musk riding the headlines like a demented cowboy, it’s easy to forget that there ARE other things happening in the financial world. Such as an abrupt 3 per cent deprecation in the renminbi to 6.55 versus the dollar in recent days.Given that little happens with the Chinese currency without tacit government approval, this is notable, and potentially worrying. Back in August 2015, a surprise 3 per cent renminbi devaluation triggered convulsions across financial markets, as investors worried that it was the start of something far bigger and spookier.Another 1.5 per cent devaluation in January 2016 then caused a second spasm of volatility on global markets. China’s FX reserves fell by almost a trillion dollars between mid-2014 to early 2016 due to capital flight and interventions.
Given ongoing fears about China — from property debt shenanigans to renewed Covid outbreaks and draconian, economically-disruptive lockdowns in places like Shanghai — the timing is super awkward. Could this be the start of another 2015 China-triggered tantrum?....
....MUCH MORE
