China allowed its currency to depreciate in value by a further 1% against the dollar last night, the third consecutive daily devaluation of the currency.
The value of the Yuan has fallen by close to 5% this week as the Chinese Authorities try to boost exports and kick-start their slowing economy.
Having stated that the first devaluation on Monday was a once-off event, the People’s Bank of China held a press conference last night to outline that there was no economic basis for continued devaluation and that it would keep the currency stable.
Meanwhile concerns about the underlying reasons for the devaluation caused many European stock markets to suffer their sharpest one-day falls in value since last October.
The markets in Germany, France and the Netherlands all fell by more than 3% where luxury goods companies, car manufacturers and mining stocks were worst affected by concerns about lower exports to China
Meanwhile capital is pouring back into safe havens such as government bonds. The yield or interest rate on German, two-year bunds fell to a record level of minus 0.284% yesterday.
