What does China's revaluation mean for markets?

China is finally to allow its currency to rise against the US dollar. Markets have perked up on the news, hoping the revaluation will play a key part in a sustainable global recovery. But are they right? John Stepek explains.

Marketsacross the globe jumped this morning on news that China plans to allow its currency, the yuan renminbi (RMB), to appreciate against the dollar.

The exact wording of Saturday's statement from China's central bank was vague. The People's Bank of China "has decided to proceed further with reform of the RMB exchange rate regime and to enhance the RMB exchange rate flexibility." But everyone took it to mean that the RMB will be allowed to rise against the dollar.

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John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.