Business Maverick: China’s Sudden Currency Plunge Raises Risk of a 2015-Style Panic

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When China’s tightly managed currency depreciates dramatically against the dollar, it can be hard to stop.

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There are plenty of reasons for the yuan to weaken against the dollar, namely diverging monetary policies, interest rates and economic conditions. And the yuan isn’t even keeping pace with many of China’s big trading partners, strengthening relative to the euro, the yen and the Australian dollar this month. In short, China may just be allowing its currency to break with a rallying dollar.

 

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