Currency risk

RMB plunge underlines key risks for global investors

The Chinese currency's breaching of a key level against the dollar has sparked market turmoil and will be posing some tough questions for investors.

China's currency weakening beyond 7 to the US dollar on Monday has wide-ranging implications for investors globally it could prompt reviews of investment portfolios and strategies and will lead to greater scrutiny of the risks posed by dollar-yuan moves, experts say.

This latest salvo in the prevailing US-China trade war has been widely seen as evidence that Beijing is not averse to using its currency as leverage in the dispute.

And yet it could encourage mainland investors to shift capital offshore, said Seema Shah, chief strategist at US fund house Principal Global Investors. It could also result in a wave of competitive depreciation of...

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