Third China devaluation; FTSE ends flat
The People’s Bank of China (PBoC) devalued the yuan by 1.1% to 6.4010 per US dollar from the previous fix of 6.3306 per dollar. This follows cuts by 1.6% and 1.85% on 11 and 12 August, respectively.
The yuan opened at a spot rate of 6.3880 per dollar and was changing hands at 6.4288 at midday, 418 points weaker than the previous day’s close.
The yuan fix has now come back to the July 2011 lows, after the devaluation in the currency by 4.65% in three days.
Many experts are suggesting China is unfairly weakening the currency to support its exporters.
The blue-chip FTSE 100 index closed down 2.86 points – flat in percentage terms – at 6,568.33, trimming the gains seen earlier in the session and underperforming broader European equities.
Travel group TUI climbed 6.6 percent after the company forecast earnings at the top end of analysts’ expectations.
Among mid-caps, Cineworld shares touched an all-time high and closed up 7.4% after the cinema operator said it was marginally ahead of its plans for the year and that the film release programme for the second half of 2015 was encouraging.