The nearly uninterrupted move since April saw the Yuan weaken 7.5%, from 6.25 to a low of 6.72. The currency has since retraced to 6.63 at the time of writing, however the past month remains the biggest one-month move in recent years. This devaluation comes during trade war talks and puts pressure on the US, as Chinese products become significantly more expensive.
Amid currency fluctuations, Chinese stocks have declined nearly 20% since the start of the year, a concerning development for global markets. For resource-based economies like South America, they need strong Asian demand to keep commodity prices up. They will face a serious ripple effect if China slows down sharply. Moving forward, expect continued volatility in these markets until trade tensions dissipate.
About the O&G Research Team
The O&G Research Team holds Series 65 and Series 3 certifications and are experienced traders in international financial markets.
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