The second unexpected devaluation of the Chinese currency CNY caused some turbulent market movements in currencies today.
I was surprised that the EUR went to a 1-week high against the USD up by almost 1.5% on a single day to a 1-month high.
Can someone explain why the CNY devalutation would benefit the EUR and harm the USD?
As we know, the EUR offers a negative ECB rate, while the fed is expected to raise its rate, hence I expected the USD to rise vs. the EUR. Then I thought that maybe together with a solution of the Greek debt crisis markets preferred going into EUR and saw the USD already overvalued.