“SMSFs who still hold cash can use the volatility in the market to get into international and Australian shares around this time,” said Mr Lucas.

The three per cent drop in the currency last week, he said, is relatively small for a developing country trying to increase its export competitiveness.

“And with the People’s Bank of China raising the daily ‘fix’ for dollar/renminbi by only 1.9 per cent, the market will calm down and realise it’s not linked to a strategy of major competitive depreciation,” Mr Lucas said.

“The volatility has already begun to abate after Beijing allowed the currency to strengthen for the first time in four days on Friday.”

Mr Lucas said China’s currency move has also prompted speculation that the US Federal Reserve might hold back from raising interest rates next month.

“Concerns about deflation are receding with last week’s encouraging US economic data, which included an increase in industrial production for July that was much higher than the consensus forecast,” Mr Lucas said.

The renminbi change saw European equities sharply underperform their US counterparts, he added.

“The euro’s greater rise against the Renminbi than the US dollar left companies with significant exposure to China – such as carmakers and luxury goods groups – which experienced large falls in their share prices,” he said.

“Adding fuel to the fire was the release of provisional euro-zone GDP figures, which revealed that growth lost some pace in Q2. Indeed, the region's 0.3 per cent expansion was weaker than the consensus forecast and also the previous two quarters.”