Everything you Need to Know about the Yuan Devaluation

In a move with repercussions for the global economy and especially for investors, whose ranks have been rising thanks to cheap online trading, China’s Reserve Bank pushed the Yuan lower by 3% on August 11th and continued till the 13th

Here’s everything you need to know on the subject:

1.How

The People’s Bank of China increased the supply of the currency. An increase in supply when demand remains constant leads to a fall in prices. Economics 101.

Read more: Everything you Need to Know about the Yuan Devaluation

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Read more: Financial decisions you need to look into before you turn 30!

BRACKET ORDER

Bracket order is a type of intraday order where you can enter a new position along with a target/exit price and a stop loss order. As soon as the market order is executed, the system places two more orders for profit booking and stop loss. When one of these two orders are executed, the other order is cancelled automatically.

Read more: BRACKET ORDER

COVER ORDER

It is a special type of order for intra-day positions and to take advantage of extra exposure while being protected through a stop-loss order. With the help of this feature you can place two orders, one to take position at market price and the other one to cover the same by specifying stop loss trigger point (SLTP) and the limit price. This strategy not only helps limit your risk but also helps in maximising your profit, as it gives you a clear view of your maximum downside in that particular position beforehand.

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Repercussions of China Currency Depreciation on the World

This is a part of a series on China’s current situation. The first post, on the Yuan devaluation can be found here. The next post on the series is on the latest Market crash.

Over the past decade, China has emerged as the second largest economy in the world, the world’s factory and the largest consumer for several commodities. The age-old adage- When the US sneezes, the whole world catches a cold can now easily be applied to China.

And on August 11th, China sneezed. It continued sneezing for the next three days, causing all sorts of worry and activity amongst the other economies.

We are referring, of course, to the Yuan devaluation. While the devaluation was just about 3%, here’s the impact it will have on the rest of the world

a) Cheaper Commodities: China’s voracious appetite for commodities meant that several economies, notably Australia, began using Yuan for transacting with China. Now that Yuan has been devalued, China will now be able to buy commodities for a lesser rate.

Read more: Repercussions of China Currency Depreciation on the World

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