Should investors fear another currency war?

At the start of the year, broad-based fears that an emergency step devaluation of the renminbi was needed to prevent China's economy undergoing a 'hard-landing' were weighing heavily on the country's stockmarket.

However, Chinese equities have since outperformed those of the other four largest economies of the world (UK, Germany, US and Japan). By moving to manage the renminbi against a basket of currencies (those of the country's trading partners) rather than just the US dollar, China's authorities managed to provide some stability. Fed holds rates but signals rise this year They have subsequently been able to devalue the currency against the dollar gradually without garnering much attention from investors (it has now devalued by around 7.5% against the US dollar since China moved to a mar...