The Chinese yuan crashed today, according to Google.
Google was wrong; everything is fine. But wasn't the only service to show the sketchy numbers. Earlier this afternoon, a scary sight appeared elsewhere, including the popular currency portal XE.com: a surprise 10% drop in the value of the Chinese currency against the dollar. That's a huge fall, far beyond the slim 2% movements typically allowed by the Chinese government.
It came just days after Donald Trump's surprise phone call to the newly elected president of Taiwan, and less than 24 hours after some pointed Trump tweets about Chinese trade policy.
Plenty of economic and foreign policy watchers were already worried about how China would react — so was this its response, a massive surprise devaluation of a currency that Trump insists is already being kept at artificially low levels to hurt American industry?
Foreign Policy took the bait. "Could Beijing have have just answered President-elect Donald Trump’s weekend provocations?" the magazine asked.
But few other outlets — and nobody in the financial press — took the drop seriously. Within a few hours, XE.com was reporting the yuan had suddenly shot back up to normal.
The massive swing in the numbers appears to have been caused by one London-based broker, ICAP, which was quoting a price for the yuan that was being fed into the services that supply financial data to the world. The rates were not being matched by anyone else in the market, but they seem to have fed through to the price figures being quoted by Google Finance and XE, among others.
ICAP said in a statement Tuesday, "Due to the inaccuracy of a third party feed, ICAP vendor screens also displayed an inaccuracy, quoting in the 7.47 to 7.48 range when the correct market rate was in the 6.86 to 6.87 range. ICAP has corrected the price and removed the third party from its feed.” The company wouldn't say who the third party was that was providing the incorrect data. Its quotes come from "internal data sources and several third party feeds," it said in a statement.
Bloomberg included ICAP's quotes among its many data sources, but was quoting the yuan at 6.88 to the dollar today.
XE said in a statement that "several" of its data services "provided rates which our algorithms interpreted as a genuine movement" in the Chinese currency. The company said it had confirmed that they were inaccurate and that it is investigating the discrepancy. XE wouldn't say who the data providers were, citing prior agreements it has with them.
One possibility is that the quoting error could have been caused by confusion between the the number of yuan to euro as opposed to the dollar. According to Bloomberg, the yuan was trading at 7.39 to the euro today.
The People's Bank of China, the country's central bank, actually upped the midpoint that the nation's currency trades around Tuesday morning following the exchange-rate mishap.
This piece has been updated with statements from ICAP and XE acknowledging and explaining the erroneous quotes for the value of the Chinese currency in dollars.
ICAP doesn't have traders who provide quotes — a reference to ICAP traders has been removed.