Yuan Devaluation

China surprised the financial markets by cutting its daily reference rate by 1.9% in August 2015, prompting the yuan’s biggest single-day drop since the end of its dual-currency system in 1994. Just months after the shock wore off, the central bank stepped in again by cutting the yuan’s reference rates eight times in a row in January of 2016. The yuan has recovered since the cuts earlier this year, but its recent strength has renewed concerns of a devaluation. In this article, we’ll look at three exchange-traded funds (ETFs) that could outperform and three ETFs that could underperform in the event of a yuan devaluation.