China allowing the CNY to strengthen should (in theory, mind you) allow the dollar to gains dome ground versus major currencies and lose ground versus emerging markets currencies, where the adjustment is needed but precluded by central bank intervention.
If China accepts a firmer CNY, than Brazil can accept a firmer BRL and still remain competitive. Same for India, Korea, Taiwan (and the list goes on…) .
With gold extending to new record highs and central banks still selling dollars on dips, it did not work out that way today, but should over the medium-term if CNY continues to rise.
