Options Wonderland

[3xBuBu]

Yuan weakens again

There was a sharp depreciation in the yuan just ahead of the plunge in Chinese shares. China cut the yuan's value against the dollar, making it weaker than 6.5 for the first time in more than four-and-a-half years. There's speculation that the People's Bank of China has abandoned trying to hold the yuan up against the dollar, which means it's signalling that it won't step in to shore up the yuan. There are concerns that this indicates money is flowing out of China, and that the fall could get out of control. Some investors may be worried about what would happen if the yuan continues to weaken - and the fact that policy makers are allowing it to weaken shows they're concerned about the economy's outlook too.

China's stock market plunged 7 percent on Monday, triggering a market circuit breaker. The markets were down partly on concerns that a six-month ban on share sales by major shareholders would spark a sell-off when it expires on Jan. 8.


http://www.bbc.com/news/business-35220056




http://stockcharts.com/public/3421479/tenpp/9