Stocks around the world rocked by trade tensions: Live updates - CNN

A weaker Chinese yuan will have a negative impact on the currencies of emerging markets, according to Rajiv Biswas, IHS Markit's chief economist for Asia.

Investors had been already been increasingly wary about buying into those currencies, particularly because of the escalating US-China trade war and recent moves to ease monetary policy in countries such as South Korea, Malaysia, Philippines and Indonesia.

Now, "the yuan’s slide against the US dollar will reinforce negative sentiment in global financial markets towards emerging markets currencies," Biswas wrote in a research note.

A weaker yuan will make Chinese exports cheaper, which in turn could hurt exports in emerging markets that compete with China in manufactured goods, he said. Central banks in Asia may now respond with another round of interest rate cuts.

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