Nowhere to go but up!
This is where the US-China trade war seems to be heading. This is after US President Donald Trump on Monday labeled China as a “currency manipulator”.
Trump expressed his thoughts via Twitter about China’s central bank and its intentional move to weaken its currency in the midst of the trade conflict between them and the United States.
Last Monday, China’s yuan depreciated below 7, its lowest exchange rate against the dollar in a decade. Now, the move was observed as retaliation against the US as Trump vowed to slap China with more tariffs amounting to $300 billion Chinese goods.
It can be seen as a repeat of history since the US has done the same thing with former US President Bill Clinton during the early 1900s, tagging China as a “currency manipulator”.
But the Treasury department of US bore that China’s central bank admitted that it has “extensive experience manipulating its currency and remains prepared to do so on an ongoing basis,” referring to an official statement released by the People’s Bank of China.
A currency war between the dollar and yuan is a possibility that analysts carefully look into in the coming days.
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