China's Yuan Devaluation: What You Need To Know

China’s Yuan Devaluation: What You Need To Know by Brad McMillan, Commonwealth Financial Network

Some mornings I wake up and wonder what I should blog about. Not today. Looking at my phone in bed to scan the headlines, I couldn’t believe the news—China had devalued its currency! This is a big deal in the financial world.

Why did China make this move?

The Chinese government is very smart and very rational. By devaluing its currency, in this precise way, it intends to achieve some specific goals.

Goal #1: Make the yuan more market oriented. This is the goal China wants to talk about. With the yuan’s trading price now based on the previous day’s exchange rate, the new valuation is arguably...