Business Report - 8/12/15: China devalues its currency - Hawaii News Now - KGMB and KHNL

Business Report - 8/12/15: China devalues its currency

HONOLULU (HawaiiNewsNow) -

The relative value of different brands of money affects the price of anything you buy that's made someplace else, where the manufacturers is paying the workers in another currency. As of this morning, the yen is at 124 to the dollar. The bigger the number, the more yen it takes to buy a buck. The bigger the number, the less each individual yen is worth. The yen is weak and the dollar strong right now, which means Japanese-made goods cost less when bought in dollars, and American goods cost more in Japan - unless, of course, the manufacturer changes the price, accepting a smaller profit, which has its own consequences.

What's going on this week is, the Chinese economy is growing more slowly, and Chinese officials decided to devalue their currency, the yuan, to make Chinese good cheaper in the rest of the world, while raising the cost for Chinese consumers buying what the rest of the world makes.

That's bad for all the major corporations that sell to China - everybody from General Motors to Hewlett Packard to hoteliers that have properties in China. Some investors are selling those stocks, and that's why the Dow is down more than 200 points today. The Nikkei fell more than 300 points overnight. European markets are also falling on the news.

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