Oops! China did it again....devalues its currency again

The Australian dollar has again plunged one US cent after China's central bank made another aggressive devaluation of its currency. The People's Bank of China announced a 1.6 per cent devaluation of the yuan, following its surprise 1.85 per cent devaluation on Tuesday. The PBoC said Tuesday's move was an attempt to prop up China's weakening export sector; the PBoC changed the trading range for the yuan against the US dollar. Like most major currencies, the Australian dollar fell following the move, to a low of 72.16 US cents, from 73.23 cents just before the announcement at 1115 AEST, which was similar to Tuesday's fall. As we have been saying for the past week, China had to move on Yuan as their economy slowed, manufacturing struggled and US rate cycle looks to turn up. We expect more devaluations to come over time and bring down AUDUSD further to mid 60's.