Asian pairs tumble on panic from Yuan’s continued devaluation

Almost all major Asian currency counterparts except JPY are set to lose against dollar as The Chinese central bank cut its reference rate by a record 1.9% yesterday generating a universal disorder and reduced it again by 1.6% today. The depreciation of the Chinese Yuan has sent Asain markets into a panic.

All Asian FX pairs including TWD, SGD and KRW are under pressure after Chinese central bank surprised markets by devaluing it and the USD-INR currency pair has been no exception with the pair nearing near-term lows. It is expected that the pair to trade weak in a range of Rs 64.20-64.50/USD for the day. The dollar index was trading above the 97 mark.

The rupee fell sharply in early trade on China's yuan devaluation. The currency has opened at 64.55 a dollar, the lowest level since September 2013, down 36 paisa compared to 64.19 per dollar in previous session. USDTWD shown a gap up opening 32.180 from previous highs of 31.739, while USDSGD is attempting break yesterday's highs at 1.41554. USDKRW extending yesterday's loss from 1182.50 to 1191.20.

The Yuan has been a basis for Asian currency stability during past economic disaster and Chinese establishments propelled it up earlier this year to put off capital outflows and make a case for official reserve status at the IMF. China's policy moves to fortify exporters gradually and shoot the economic slowdown since 1990 heightens the risk of competitive currency devaluations as global demand wanes.