Yuan drops for third day running

Yuan drops for third day running

China has devalued its currency for a third day running, after the first surprise devaluation on Tuesday.

The central bank stated today that there was no basis for further depreciation in the yuan given strong economic fundamentals. The Chinese markets reacted positively to the news, reversing early losses and rising more than 1 percent. The CSI300 index .CSI300 rose 1.5 percent to 4,075.46, while the Shanghai Composite Index .SSEC gained 1.8 percent to 3,954.56 points.

Should the yuan trade in the lower end of its 2% margin below the midpoint, the central bank may well lower the rate again on Friday.