Chart of the week: investors ignore China’s sinking currency

Renminibi exchange rates chart

China’s renminbi, or yuan, has slid by more than 6% in trade-weighted terms this year, and has also kept falling against the dollar. In January, the currency’s fall caused severe volatility. Investors feared that it could kick off a round of competitive devaluations, spreading deflation throughout the world economy. Now, markets are ignoring it. What’s changed?

Brexit has been a distraction, but emerging markets are in better shape, while US interest-rate hikes have been postponed, notes Capital Economics. The dollar has weakened since January too, so the US is less concerned about a softer yuan.