China’s central bank has taken global markets by surprise with a historic shift in its management of the yuan. As Bloomberg's Tom Orlik notes, The PBOC also signaled that going forward it would adopt a more hands-off approach to the exchange rate. Given the current direction of market pressure, that likely means depreciation. The yuan has already fallen to 6.3858 at the close of trading on Wednesday afternoon, from 6.2097 at Monday's close — a level last seen in the summer of 2012. In this chart, we map out the history of moves in the yuan in the decade since the PBOC broke the dollar peg in 2005... and all the rhetoric that will now be undone...
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