We don’t know how frequently the People’s Bank of China will countenance currency adjustments. We don’t know which currencies are contained within the new currency basket. We don’t know the relative weights of currencies within the new basket, nor do we know the basis for those weights (relative trade flows, size of capital flows?). We don’t know which market conditions would persuade the Chinese authorities that a further adjustment might be necessary.In other words, despite the adjustment, and despite the US Administration’s decision to welcome China’s move with open arms (John Snow, the US Treasury Secretary said in the aftermath of the announcement: “I greatly welcome their commitment to using market forces, to relying on market forces to bring the currency into alignment with underlying demand and supply forces.”), the reality is that most of the currency cards are still being held in China’s hands.

In fact, Friday’s first full day of trading left the renminbi a little weaker against the dollar, suggesting that there is no automatic “crawling peg” that will allow the currency to rise on a steady and predictable basis.All of this is rather good news for the Chinese authorities. The last thing they would have wanted was either a large appreciation – which would have looked like a capitulation in the face of American pressure – or a one-way bet that might have led to massive capital inflows, thereby pushing the renminbi ever higher. Instead, the Chinese authorities appear to have created a system which allows for currency adjustment only on their terms.Consider what we don’t know. After 10 trading days, on a compound basis, the renminbi could be up a further 3 per cent. And after a year’s worth of trading days, the renminbi could be up by around 80 per cent. Impressive numbers, but better, I suspect, at demonstrating the theoretical joys of compound interest than of providing a clue of where, exactly, the renminbi will end up over the next few months. Last week’s move falls a long way short.Of course, if the new currency basket trades within a 0.3 per cent band on either side of the previous day’s closing price, it might be possible to have a rise in the currency of 0.3 per cent per day.

When the US Administration was thinking earlier this year of labelling China a “currency manipulator”, it held off in the hope that the Chinese would deliver an immediate and substantial currency revaluation: the Americans indicated at the time that “substantial” was to be taken as a gain of no less than 10 per cent. Or it could be no more than a bit of economic titillation, designed to placate foreign opinion while changing little of significance as far as China itself is concerned. From the early 1990s up until last week, China’s currency, the renminbi, had been held at RMB8.28 against the dollar. Then, on Thursday, in the words of Joseph Heller, Something Happened. Who, if anyone, blinked? China’s decision to alter its currency regime last week could be the momentous change of heart that the Americans have persistently demanded, a possible route towards the removal of external imbalances. Interims – Alliance Unichem; Alterian; AstraZeneca; Autonomy; Bede; BAT; BT Group; Capita; CSR Group; Elementis; Exel; GlaxoSmithKline; Legal & General; Liberty International; National Express; Northern Rock; Reed Elsevier; Rolls-Royce; Royal Dutch Shell; Shire Pharmaceuticals; Trinity Mirror.FRIDAY: Results: Full year – Zetar Interims – Flying Brands; Lloyds TSB; WH Ireland.. Shares in the drugs giant bounced sharply when the settlement with the FDA was reached, but they missed out on the recent stock market rally.Williams de Br?xpects GSK to post a second quarter pre-tax profit of £1.6bn, up from £1.5bn last year.Results: Full year – Homestyle.

It has its fingers crossed that a new cost savings programme will generate upgrades to earnings forecasts at the group and tells investors not to be surprised if Reuters’ interim results exceed its prior guidance of a £110m pre-tax profit.Results: Full year – Games Workshop. Interims – Cadbury Schweppes; Cookson; Reuters; Yell; Zetex.WEDNESDAY: Analysts tip first half results from Wolfson Microelectronics to show that profits at the imaging chip maker continue to grow. A rise to $9m from $8.5m can be expected by investors thanks to growing demand for the company’s chips, which are used in a variety of portable electronic devices ranging from digital cameras to MP3 players.Results: Full year – PKL Holdings. Brokers forecast profits at Cadbury to jump to £370m in the first half from £350m last time around.Williams de Br?opes that Reuters’ new strategy announcement, due on the same day as its interim results, will boost shares in the information provider.