China’s yuan fell further Tuesday against the US dollar, fueling fears about increasing global damage from Beijing’s trade war with President Donald Trump.
The central bank is “committed to maintaining the basic stability” of the yuan “at a reasonable and balanced level”, Yi said. It gave no details but said “two-way fluctuation” of the currency “will become the norm in the future”.
While the classification doesn’t mean much from a legal standpoint, it does indicate heightened tension between the U.S. and China – signalling no clear end to the current trade war.
-Chinese fight over Beijing’s trade surplus and technology policies that companies and investors worry will chill global growth. Meanwhile, the country’s current account surplus declined to 0.4 percent of the GDP of 2018, down notably from 9.2 percent in 2005, he said.
Oil prices also weakened, with global benchmark Brent crude slipping to seven-month lows, as trade tensions between the USA and China intensified worries about weakening world demand.
Then, on Tuesday, markets stabilized when the People’s Bank of China set the daily yuan rate higher than expected and said it did not manipulate the currency after a formal accusation from the US Treasury Department.
China’s central bank will sell 30 billion yuan ($4.2 billion) of bills in Hong Kong on August 14, according to a PBOC statement Tuesday.
Developing world markets have experienced large capital inflows this year as major central banks adopt accommodative policies to offset slowing growth. So when the central government allowed the value to slide further Monday (that is, Monday here – it was Tuesday in China), that caught the market’s attention, Kositkun observed. The benchmark slipped below its 200 DMA, a key level that had provided support to Emerging Markets shares.
The Dow Jones industrial average went on a 900-point freefall Monday after China allowed its currency, the yuan, to weaken beyond the seven-to-a-dollar level it hasn’t breached since before the last recession.
“The gulf is too large, but that doesn’t mean that there aren’t some things the USA and China can agree (on)”, he said. “They have a brawny tool at their disposal”. Trump’s tariffs also imply some depreciation of the renminbi is to be expected as the Chinese economy adjusts to weakening exports.
It comes days after US President Donald Trump said he would impose a 10% tariff on $300bn ($246bn) worth of Chinese goods, effectively hitting all of China’s imports to the US with duties.
That came after the latest round of talks aimed at ending the tariff war concluded in Shanghai with no sign of a deal.
In an interview with CNBC, . the director of the White House National Economic Council also stressed Washington’s determination to hold further trade talks with China.
This photo illustration taken on January 6, 2017 shows Chinese 100 yuan notes and one United States dollar notes in Beijing.
Kudlow said movement toward an agreement could change the outlook for U.S. tariffs, adding, “It takes two to tango”.
The South African rand rose 0.3% even as central bank data showed the country’s net foreign reserves fell to US$43.906 billion in July from US$43.940 billion in June.
Since then, however, “capital outflows have nearly certainly picked up”, said Julian Evans-Pritchard and Martin Lynge Rasmussen of Capital Economics in a report.
- Beijing's trade war with Australia spectacularly backfires as China is plagued by electricity woes plunging millions into darkness – after it refused delivery of $1billion of Aussie coal
- Huawei's HarmonyOS Extends to All Devices in 2021 in Bid for Tech Self-Sufficiency Amid US Trade War
- Apple has become the biggest casualty in Trump's trade war with China
- Bank of Japan vows to act 'without hesitation' if trade war triggers economic slump
- Extreme measures floated as election war dominates Trump’s last days
- Sailor stranded on 'floating prison' coal ships off the coast of China for five MONTHS due to trade war with Australia describes how the crew are drinking dirty water, have rashes and suffering from depression
- Chinese State Media: Joe Biden Will Fail to ‘Uproot’ Trump Policies
- 'Deals Are My Art Form': Recap of Four Years of Trump's Foreign Policy
- Here's Where Trump and Biden Stand on 25 Major Issues
- Donald Trump asked Theresa May if Britain had nuclear weapons, said invading Venezuela would be 'cool' and it was 'really part of the U.S.,' and thought Finland was in Russia, former National Security Advisor John Bolton's book reveals
- Trump or Biden: Will US Election Outcome Force China to Devalue its Currency?
- Trump's director of national intelligence John Ratcliffe DELAYS report on foreign interference in election and 'battles analysts to beef up its criticism of China'
- Donald Trump, the Anti-FDR
- US, Mexico, Canada sign trade pact
- Donald Trump, 'worst politician ever', on path to re-election, Thomas Frank says
- John Bolton says Donald Trump is NOT 'fit for office' and is incompetent as furious president calls former aide a 'sick puppy' and says book is 'pure fiction to make me look bad' - undermining bid to ban it from publication
- Kansas GOP Senator Asks Trump Admin to Resolve China Trade Dispute: Farmers Are on the 'Verge of Financial Collapse'
- John McCain, war hero and giant of the Senate, dies at 81
- Trump's CIA pick says he agrees with intelligence community on Russia hacking
- Vulnerable Republicans Show Signs of Breaking with Donald Trump on China Tariffs
Strategas Analyst Clifton: Trade War Threatens Trump Re-Election have 938 words, post on crcconnection.com at August 7, 2019. This is cached page on Game Breaking News. If you want remove this page, please contact us.