Chinese currency yuan sets Dax under strong pressure – SPIEGEL ONLINE

The devaluation of the Chinese currency is worldwide uncertainty on the stock markets. The German stock index (DAX) slid to the start of trading nearly 1.3 percent into the red. On Tuesday the leading index had lost 2.7 percent.

Investors are reacting to the developments of the yuan. The Chinese central bank had devalued the currency on Tuesday with a record intervention by 1.9 percent and lowered on Wednesday by another 1.6 percent. The attenuation by a total of 3.5 percent is the strongest for more than 20 years. That could affect the business with China.

Other exchanges in Europe responded insecure: The French market was at the start of trading on Wednesday around 0.9 percent below the closing price of Tuesday, the British benchmark index FTSE 100 started with 0.7 percent in the red.

The downward trend of the previous day continued on Asian stock markets. The composite index Stoxx 600 Asia / Pacific expanded its losses and fell by 1.84 percent to 169.71 points. After the second devaluation grow the likelihood that other Asian countries to follow suit and could also weaken their currencies, said one market players.

The Nikkei 225 index in Tokyo extended its previous day losses also further out and walked with a minus from 1.58 percent to 20 392.77 points from the market. The renewed yuan devaluation expressed mainly the prices of companies down, do business with China.

With the weakening of Chinese goods in the world market more competitive and the domestic economy should be stimulated. On Tuesday, the central bank had said that the devaluation of the yuan by two percent after a series of weak economic data was a one-off measure. The attenuation by

Moreover, confusion now about whether to follow further devaluation steps. Although the central bank wrote on Wednesday in a statement: “At the moment there is no basis for continuing the devaluation of the exchange rate.”

The Chinese exports slumped by 8.3 per cent compared to last year in July. The step also China’s exports could be driven again. Experts predict that exports stabilized in other countries due to the devaluation.

The yuan is not a freely floating currency such as the euro. Rather, it is linked to the Dollar: The Chinese central bank sets each working day an average or reference rate fixed to may vary to the yuan limited

Last time was the Chinese stock market plummeted in a few weeks by around 30 percent. , Because there too many small investors are active, who have now lost a lot of money, experts expect a negative impact on consumption. With drastic market interventions, the government in Beijing is trying therefore to stabilize stock prices.