In our trade ideas for today we have argued that devaluations of the CNY might be eventually negative for the Euro as the European industry is way more exposed to China than the one of the US.
BNPP argues that there are also other reasons why the initial market reaction might have been wrong. They cite that:
CNY weakness will be the most relevant for other Asian currencies, applying pressure on AUD, NZD and the JPY
RBNZ and RBA might be actually happy about these moves and the BoJ will do nothing more above verbal interventions
USD reserves are relatively low globally
therefore portfolio rebalancing will favour USD at the cost of the EUR
impact of a stronger USD on the US monetary policy will be - according to the BNPP - only moderating but not driving the USD fx trends