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Beijing pressing 'panic button'? Here's what traders need to know

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Saxo Bank's Head of FX Strategy John Hardy brings us up to date with the global implications of the latest Yuan devaluation. John had a prediction of a 20% RMB devaluation in his 'Outrageous Predictions' published on tradingfloor.com at the end of last year. Today, he's pointing out that no one really knows where this devaluation could end up because of Beijing's notorious opaque communication culture. We could still see a 20% total being reached.

China devalued the RMB by around 2% on Tuesday and, after revising the rate setting mechanisms, the currency devalued again. On Wednesday, China's central bank fixed the "official midpoint" for the yuan down 1.6% to 6.3306 against the USD.      

John outlines the trading implications, explains the key levels to watch and analyses the scale of the move by the world's second largest economy.