China’s yuan move sends Asian shares to 17-month lows
Emerging market currencies are under pressure to depreciate to remain competitive
Sydney — Asian shares hit 17-month lows on Tuesday as China allowed its currency to slip past a psychological bulwark amid sharp losses in domestic share markets. That move pressured other emerging currencies to depreciate to stay competitive. The IMF added to the malaise by cutting forecasts of global growth for both this year and next, including downgrades to the outlook for the US, China and Europe. “Risk sentiment is in a foul mood and stocks are sinking everywhere,” JPMorgan analysts said in a note. “With Chinese economic momentum continuing to weaken alongside increasing pressure from the US, currency weakness is the obvious release valve,” they warned. “A lurch through the 7.0 level by year-end is possible.” China’s central bank on Tuesday fixed its yuan at 6.9019 per dollar, breaching the 6.9000 barrier and leading speculators to push the dollar up to 6.9320 in the spot market. The drop should be a positive for exporters and did help Shanghai blue chips briefly edge up 0.1% ...
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