Threat of a currency war

As Beijing lets the renminbi slide below the symbolic level of Rmb7 to the dollar, the US labels China a currency manipulator. Markets fall in response and fears grow for the global economy. Here’s the best of this week’s opinion and analysis.

© James Ferguson

Devaluation may seem tempting, but it helps neither China nor the US 

The drop through Rmb7 per dollar will have limited economic impact

Were Beijing to sell off its Treasury holdings, extreme market volatility would follow

By letting renminbi ‘crack seven’, Beijing has signalled near-term deal with US is unlikely 

US allegations that China is manipulating its currency burst into the open again

Renminbi’s fall stokes US ire

More from this Series

Investors ask why China’s central bank has allowed currency to weaken beyond symbolic threshold

Test for policymakers as worries mount over global economy and Sino-US tensions

Investors must now guess how much pain the two countries will inflict on each other