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Courtesy of Mish.
Yesterday, I reported China Joins Currency War With Surprise Devaluation, Biggest One-Day Move on Record.
The yuan fell about 2% vs the dollar yesterday, the biggest one-day currency move since 1993.
Economists surmised this was a "one time" event. I begged to differ.
China Pushes Yuan Sill Lower
Today we learn, China Pushes Yuan Down Further, Fuels Fears of Currency War.
China's yuan hit a four-year low on Wednesday, falling for a second day after authorities devalued it in a move that sparked fears of a global currency war and accusations that Beijing was giving an unfair advantage to its struggling exporters.
Spot yuan in China fell to 6.44 per dollar, its weakest since August 2011, after the central bank set its daily midpoint reference at 6.3306, even weaker than Tuesday's devaluation.
The currency fared worse in international trade, touching 6.57.
The central bank, which had described the devaluation as a one-off step to make the yuan (CNY=CFXS) more responsive to market forces, sought to reassure financial markets on Wednesday that it was not embarking on a steady depreciation.
One Time Event
Supposedly, the move yesterday was a one time event.
In essence, China said "Don't worry, there's only one cockroach.
Clearly there are more than one. In fact, it is nearly impossible for there to be only one cockroach….
