I disagree with the breathless analysis just offered by Simon Hobbs on CNBC.
He highlighted a note from Faros Trading which says that China has announces essentially that it will re-peg the CNY to the dollar, as they did in the post-Lehman period.
Simon says it was the Chinese dollar buying which weakened the euro during that period. Nonsense. It was global deleveraging, just like we are seeing today.
If China makes the CNY less flexible, it will buy more dollars, according to Hobbs. Not really. It will just buy them at a higher exchange rate, keeping the CNY even more artificially week than it is today.
China will also continue to diversify its currency holdings as it accumulates ever more reserves.
The euro is falling for a thousand reasons. A Chinese re-peg is not one of them.