Reuters: China lets yuan break key 7 level for first time in decade as trade war worsens
SHANGHAI (Reuters) - China let the yuan breach the key 7-per-dollar level on Monday for the first time in more than a decade, in a sign Beijing might be willing to tolerate more currency weakness that could further inflame a trade conflict with the United States.
The sharp 1.4% drop in the yuan comes days after U.S. President Donald Trump stunned financial markets by vowing to impose 10% tariffs on the remaining $300 billion of Chinese imports from Sept. 1, abruptly breaking a brief ceasefire in a bruising trade war that has disrupted global supply chains and slowed growth.
Some analysts said the yuan move could unleash a dangerous new front in the trade hostilities - a currency war.
The People’s Bank of China (PBOC) provided the early impetus for yuan bears by setting a daily rate for the currency at its weakest level in eight months.
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WNU Editor: This Chinese decision to escalate the trade war is having a global impact .... Global stock markets crash as US trade war with China escalates (RT). This Chinese decision is also telling me that China is making it known that they will not negotiate any trade deal with the U.S.. My prediction .... expect more tariffs on Chinese goods.
More News On China Escalating The Trade War
China lets yuan weaken and stops buying U.S. crops, escalating trade war -- Reuters
Trump accuses China of manipulating currency as yuan weakens -- AP
Donald Trump rants that China is guilty of 'currency manipulation' as Wall Street plunges after Beijing lets the value of the yuan fall to a new low against the dollar -- Daily Mail
China Takes On Trump by Weakening Yuan, Halting Crop Imports -- Bloomberg
China's yuan slips to 11-year low amid trade war -- DW
China exchange rate drop could continue into 2020 as it tries to offset US tariff impact, analysts say -- SCMP
Yuan slump ramps up trade war fears -- Asia Times
Does China have enough US dollars to survive the US trade war? -- SCMP
If Trump makes a second term, I expect China to be off limits for most US tourists and companies while Chinese will not be welcomed to go to the USA as students, tourists and companies. A true split that will reverberate around the globe upsetting alliances and trading relationships. Nations in Europe will race to replace the US in China's economy regardless of their American security alliances. This is one of those events that has an echo for decades to come.
ReplyDeleteAre you trolling or are you seriously ?
ReplyDeleteThe only reason the US can have huge trade deficits is because the dollar is a reserve currency. This will not last. It gives us a 'cushion' that is all.
A country that does not have a reserve currency and has a a large deficit with China will suffer severe inflation in 1 to 3 years.
I am against long term trade deficits for any country.