The yuan is falling again as investors grapple with fresh prospects of deteriorating trade relations between the U.S. and China.
China’s currency has pared around half the gains it garnered in a two-day rally sparked by signs of progress in trade talks at last weekend’s summit of Group of 20 leaders in Buenos Aires. The arrest this week of a top Chinese tech executive has some investors concerned that a trade truce between the U.S. and China could be more complicated to maintain than anticipated.
The yuan is down 5.5% against the dollar this year, on track for its biggest loss against the U.S. currency since 2016. One dollar recently purchased 6.88 offshore yuan
CNHUSD, -0.0029%
, compared with around 6.30 this summer.
More weakness in the yuan could further complicate trade talks between the U.S. and China, analysts said, as a lower yuan makes Chinese exports more competitive abroad. President Trump has complained that China and Europe are intentionally weakening their currencies to disadvantage the U.S., and the U.S. Treasury voiced concern in October about Beijing’s currency practices, though it stopped short of labeling China a “currency manipulator.”
An expanded version of this report appears on WSJ.com.
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Source : MTV
