FXStreet (Delhi) – Michael Every, Head of Financial Markets at Rabobank, suggests that the the big announcement came from China ahead of a big announcement from the US. Key Quotes “This week (December 14-18) is likely to see the first Fed rate hike in almost a decade, and the first in the ‘New Normal’. For obvious reasons, markets will remain focused on that crucial event, which is set to have a major impact on almost all asset classes. In particular, there is a well-documented concern over how emerging markets, where growth has slowed and USD-denominated debt has risen sharply, will cope with tighter US monetary policy.” “Against this backdrop, it is arguably not a coincidence that China has just ‘surprised’ the markets once again. On Friday December 11, after the Asian close, the PBoC posted an editorial on its website from its own China Foreign Exchange Trade System (CFETS) with details of a new official trade-weighted index (TWI) for CNY.” “Crucially, up until now CNY has been looked at by the PBoC solely in terms of the USD/CNY cross. However, from now on the PBoC will be looking at CNY on this broader TWI basis. That is highly significant because there was also open recognition that “even though CNY has depreciated against USD since the beginning of this year, it has appreciated modestly against a basket of currencies. Therefore, CNY is relatively a strong currency among the major international currencies.” For more information, read our latest forex news.