Currencies
Yuan Devaluation Market Chatter Grows as Trade War Worsens
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The deepening trade war is raising speculation in financial markets that China may resort to aggressively devaluing the yuan against the dollar in a break of their policy of pursuing a stable currency.
Strategists from New York to Hong Kong are game-planning if Beijing’s Friday warning of a “resolute” response to President Donald Trump’s tariffs could include allowing the yuan to weaken sharply, a controversial and non-consensus move which would in theory make Chinese exports cheaper but risk capital flight. President Xi Jinping’s administration already announced a 34% tariff on all imports from the US starting April 10.