It was nearly a century ago during the battle of the Marne that Ferdinand Foch, a French marshal, sent a message to his superiors: “My centre is giving way, my right is in retreat. Situation excellent. I shall attack.”
That sentiment could be echoed by hawks on the Federal Open Market Committee as China’s currency devaluation gives their dovish colleagues further ammunition for questioning the wisdom of raising US interest rates at this point in the economic cycle.
China’s move is turning market mood against an imminent lift-off by the US Federal Reserve. If the mood was reasonably gung-ho last week, it had a whiff of draft-dodging by the time the implications of the strategic shift in the People’s Bank of China’s exchange rate policy sank in.