For a few hectic hours earlier this morning, it appeared as though the Chinese yuan had fallen off a cliff, and no one knew why.
Citing data from the popular currency portal XE.com, Google was quoting the yuan at over 7.4 against the dollar. That would be a 10% cut in value, bringing the renminbi overnight to its cheapest level since the 2008 financial crisis. Forex watchers were a bit concerned…
— David Fickling (@davidfickling) December 5, 2016
BREAKING Talked to XE and they now confirm that upstream providers are affirming this rate (7.48 RMB to USD currently). This is bad.
— Kaiser Kuo (@KaiserKuo) December 5, 2016
Considering that the Chinese government typically doesn’t allow currency movements to shift beyond 2%, experts were at a loss to explain the precipitous drop. Though some couldn’t help but be reminded of a certain viral Tweet made the night before:
Did China ask us if it was OK to devalue their currency (making it hard for our companies to compete), heavily tax our products going into..
— Donald J. Trump (@realDonaldTrump) December 4, 2016
Was Beijing responding dramatically to Trump’s Twitter rant accusing China of artificially keeping its currency low? Or was it just a glitch in the system?
Fortunately, it was the latter. Worries soon began to die down when the yuan quickly rebounded to its normal levels of 6.87 to the dollar.
— Save R Homes (@SaveRHomes) December 5, 2016
While it’s not entirely clear what happened to cause the error, it appears as though the rate had been misreported by London-based broker ICAP, which may have mixed up the euro exchange rate and the dollar exchange rate. Whoopsies!
— Neil Gough (@n_gough) December 6, 2016
Or maybe it was the curse of the black swan!
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