Investors 'caught off guard' by China's shock currency devaluation

Fund managers are concerned the Chinese central bank's shock move to devalue its currency could lead to the renminbi depreciating further, sparking heightened capital flight from the region and the rest of Asia.

As Investment Week reported this morning, the People's Bank of China surprised investors by weakening its currency by almost 2% after a weekend of poor trade data. The central bank adjusts its currency every day to a certain point and allows it to trade two percentage points in either direction, but on Monday the central bank reduced the renminbi's daily fix to the US dollar by 1.9%, the most it has lowered the currency in 20 years. Managers warn of ‘massive repercussions' from unwinding of China bubble From now on, the Bank will change the way it fixes the currency taking i...