China still undervalues ​​the yuan, sales on European markets – Republic

Milan – China floored the markets of the Old Continent. Surprisingly Beijing has devalued the yuan again, after a first cut of the currency – completely unexpected – took place yesterday: in essence, the Chinese central bank has cut the exchange rate against the dollar by more than 3.5%. It continues the currency war: the immediate reaction of European markets after the collapse of the eve reopen the session dedicated sales: Milan Stock Exchange lost 1.3%.

And while the protests are raised by the Western world for the series of unilateral actions of Beijing, the Chinese government is justified by explaining the need to intervene in support of the country’s economic recovery. On the other hand, the manufacturing industry is showing signs of slowing down (+ 6% in July, below estimates) as exports and retail sales grew by “only” 10.5%. A thesis married even the International Monetary Fund that greeted positively the double devaluation of the yuan by defining the operation as an alignment to markets around the world.

There is great tension, especially in the luxury market and the fashion in which Italy is the protagonist than the economic policy of China: Beijing had, in fact, announced plans to help the transition from an economy tied to exports sustained by domestic consumption, a strategy that seems now again changed. According to the IMF, however, greater flexibility in the rates – that were anchored to the dollar – will enable Beijing rapid “integration into global financial markets.

And this leads some analysts to believe that the Federal Reserve now have a good reason not to start raising US interest rates – for the first time since 2006 – at the meeting next month. Others point out, however, as the US central bank is more focused on the US labor market and after employment report for July in line with estimates, will be critical to August, which will come just a few weeks before the meeting of 16 and 17 September.

Last night on Wall Street the Dow Jones lost the ‘ 1.21%, erasing much of the gains Monday, the S & amp; P 500 surrendered 0.96%, the Nasdaq has left 1.27%. In terms of raw materials does not stop the fall in oil prices in the wake of the devaluation of the Chinese yuan: WTI crude oil yields 0.5% to 42.89 after yesterday had slid by more than 4% by touching the lowest level in six years. New fall for gold: bullion for immediate delivery to down 0.4% to $ 1,103 an ounce.

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