Currency wars: China is trying to weaken its link to the dollar and the Fed

The papers called Beijing's surprise devaluation an "escalation of currency wars", with some stating the move was "best seen as a distress signal from Beijing".

Some analysts said China's devaluation was a move to boost exports because it was losing control of its economy. Practically speaking, a few percent decline in the renminbi will have very little consequence on China's competitiveness, a point that was later echoed by China's policymakers. Mind you, China's currency did not weaken in isolation, hence China did not achieve any gains in terms of competitiveness. More concerning for the market was the fact the renminbi became unhinged from the prior fixing mechanism and therefore could theoretically weaken 2% per day with no end in sight,...