CREDIT SUISSE: This won't be the last time China shaves the yuan's value
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China's currency just hit a four-year low against the dollar as the country moved to devalue for a second day running. And there could be further to fall, according to analysts from Credit Suisse.
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China aimed for an exchange rate of 6.33 to the dollar today. Credit Suisse sees the bottom at 6.5, with the Chinese government announcing a series of cuts to get there.
Here's what the double China devaluation is doing to the market:
Investing.com
Here are the main points from Credit Suisse:
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- we now project a few days of substantial devaluation, followed by a strong statement by the authority that the CNY has reached its fair-value based on a trade-weighted basket.
- we are inclined to believe that Beijing may draw a line at around the 6.5 level.
- bad news for Asian assets and commodities, but that is what Beijing wants-moving a few steps away from the USD in a time of Fed tightening
- The Chinese unit had been known as a steady and appreciation-biased currency over the past decade. That perception seems to be changing, affecting asset prices that were perceived similar to the China of the above said factor
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