Trading Video: Yuan Devaluation Drives Aussie Dollar and Global Equities Lower
• China's unexpected Yuan devaluation move seems to have had more impact on global markets than its own
• The Dow has returned to its H&S neckline and threatens reversal, but this time other indexes are following
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China's unexpected Yuan devaluation seems to have broad financial market implications...and not the normal 'rally on stimulus' we have come to expect. On a second day's 1.6 percent decrease in the fix rate by the PBoC, the markets are extending sharp declines suffered in different corners of the markets. The Australian Dollar seems to be standing in the direct blast as its exports are suddenly rendered 'expensive'. However, there is a more troubling response from the global capital markets with equities diving in response to the move. Is China's move feeding more than FX volatility? Is competitive monetary policy opening fissures in economic activity and generating concern over financial stability? We discuss this in today's Trading Video.
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.