The People's Bank of China devalued its yuan in a surprise move to align the currency more closely with global markets, sending U.S. stocks lower, but TheStreet’s Jim Cramer says there are stocks to buy that are immune to China’s woes. The yuan posted its largest one-day drop in over 20 years, strengthening the U.S. dollar, which rose 1.83 percent against the yuan. The move also comes as China seeks reserve currency status from the International Monetary Fund, which says the currency isn't priced by markets. That's because yuan is only allowed to trade 2 percent above or below the U.S. dollar. Though Real Money contributor Doug Kass thinks China will devalue its currency by more than 3 percent against the dollar. The uncertainty surrounding China’s currency is set to continue, analysts say. ‘This is the harbinger of the currency wars ahead,’ said Michael Ingram a London-based markets analyst with BGC Partners. ‘The yuan is still 15 percent overvalued and I’m interested to see how this plays out in the run up to a U.S. presidential election.’ Stocks in China reacted modestly to the news, with the Shanghai Composite Index closing Tuesday's session flat. TheStreet’s Scott Gamm reports from New York.
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