China Yuan Devaluation Could Delay The Fed Rate Rise?

Yuan Devaluation hitting so hard, money market, stocks market, USD as a safe haven currency, traders and investors, China's surprise devaluation of its currency is an admission of economic weakness and could delay the timing of the Federal Reserve's expected U.S. interest rate hike, strategist Boris Schlossberg told CNBC on Tuesday. China Economic going to more worsen, but they fight back, While agreeing the currency move signals economic troubles in China, Jim McCaughan, chief executive of Principal Global Investors, said the Fed will focus on the domestic economic data instead of trying to extrapolate how a slowdown in the Chinese economy might slow activity in the U.S. trade and U.S. multinational exporters companies


As reported before, The People's Bank of China on Tuesday implemented a one-time depreciation of nearly 2 percent to the yuan to levels last seen three years ago against the dollar. The move was also the biggest one-day fall since a massive devaluation in 1994, when China aligned its official and market rates.

Meanwhile another point of view from David Kelly, chief global strategist at JPMorgan Funds, lands in the McCaughan camp on the Fed. "I don't think the Federal Reserve will back away from tightening because of of this one event. There's lots else that could happen between now and the middle of September," he told CNBC.

While a weaker yuan can hurt U.S. multinational companies' exports, growth in China has been largely infrastructure driven, which draws in commodities but not consumer goods, said McCaughan, whose firm manages nearly $343 billion in assets. Wall Street was shaping up for a rough open Tuesday morning, after the U.S. stock market Monday broke a seven-session losing streak. But Kelly said he would not shy away from U.S. stocks based on China's currency move.

source: CNBC