Well – the deflation transferred from Japan to Australia and now China undertakes a rather large devaluation.
Actually biggest devaluation since August 2015.
To think I was only discussing the over-valuation of the Yuan this afternoon.
In real terms – this devaluation is insignificant – and will have no impact on India and Vietnam – nor Malaysia.
I expect that they will try and find the right price over time – the problem is though it is still overvalued. This is my opinion – not that of the IMF who think that it was at a fair price – and supported China when they were ‘named and shamed’ by the U.S. Treasury recently.
Now one must wonder what the U.S. Treasury (Jack Lew) and the Fed (Janet Yellen) views on these actions are – basically China said ‘F… You’.
Are they themselves aware that this mini currency war is about their procrastinations with the interest rates?
Doubt it – their respective heads are firmly planted where the sun don’t shine.