It’s the new must-watch indicator for markets worldwide, with the power to move prices from Tokyo to London and Chicago.

The Chinese central bank’s daily fixing for the yuan, long overlooked by investors outside the country, has transformed into a global market-moving event after a devaluation on Tuesday took almost everyone by surprise.

For the past three days, it has influenced everything from Asian currencies to commodities and U.S. index futures, prompting traders around the world to change their schedules so they can react to the announcement that comes each day at 9:16 a.m. Hong Kong time.

“We are waking up early and all my friends have the yuan on the top of their screens,” said Dhiraj Bhutoria, a director at Varun Tradecom Pvt, a Kolkata-based securities brokerage.

After years as one of the least-volatile major currencies, the yuan tumbled the most since 1994 on Tuesday after China allowed market forces to have more influence. Where the currency goes from here will have an impact not only on growth prospects for Asia’s largest economy, but also the Federal Reserve’s interest rate policy and earnings for international companies from Apple Inc. to BMW AG.

David Fuller's view

There you were, enjoying shucking the silver queen corn picked that morning in rural America, or perhaps adding another specially marinated rib to the barbi in Australia, or trimming the roses in your English garden, or enjoying any other gentle pursuit somewhere else, secure in the knowledge that your sensible portfolio offered financial protection, respectable dividends and long-term growth. 

Nevertheless, healthy curiosity prompted you to turn on the screen, and lo, hysterical comments regarding China, which of course is now the biggest elephant in the global room. 

We will have to get used to it.  International financial news will not tell us how many cats did not get stuck up a tree this morning.  Instead, they will report every crisis, real or imagined which occurs around the world.  Even poor little Greece preyed on our minds for months. 

Extreme forecasts will prove newsworthy, especially scary ones.  Behavioural psychologists tell us that bearish forecasts sound more intelligent, if only because they satisfy some internal masochistic need.  They also attract attention and increase turnover, leading to some temporary collateral damage.

What can one do about all this?  It may help to remember one of the oldest and best strategies in the world: Buy low and sell high, especially on a medium to longer-term basis.