News that China’s central bank devalued its currency this morning has seen bids in the Aussie dollar collapse.
At 0.7347 now it is around 0.9% lower than the price at the start of the Asian trading day.
The rationale for the move is likely to be that if China sees its economic situation as so dire (remember that exports released over the weekend slipped into negative territory for the year) that it needs to reverse course and weaken its currency, to help the economy and exports, then that can’t be good for Australia or Australian exports.
Here’s the chart:
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