China Devaluation: Initial Thoughts
August 12, 2015
Following the recent and unexpected People Bank of China move on Chinese currency, our Global Asset Allocation Research Team has prepared a short note with initial thoughts. In our view, the PBOC is not acting to grab export market share through competitive devaluation. It’s merely exercising its mandate to prevent massive appreciation on a trade weighted basis. At present, we do not expect a Chinese hard landing, and thus don’t see China launching a currency war. However, in anticipation of further market volatility, we maintain a cautious stance on risky assets.