China Devalues Most In 8 Weeks, Offshore Yuan Slides To 3-Week Lows

Following USD strength last week, China has come back to work after the disappointment of the Shanghai non-accord and weakened the Yuan fix by 0.2% – the most since January 7th.

This move follows pressure from offshore Yuan weakness since traders returned from Golden Week – driving the onshore-offshore spread out to its widest since The PBOC stepped in and stomped the shorts.

After a few weeks of stability, it appears China is forced to let the Yuan slip back out to where its CDS (a market it is not manipulating directly yet) implied it to be after shaking out some weak shorts at the end of January.

Stocks are opening modestly to the downside – following weakness in US from Friday