From Asia Times via MENAFN, November 11:
Since Donald Trump's November 5 election win, the Chinese yuan has traded below the central bank's fixing rate. That suggests markets are bracing for a weaker yuan as the former and future US president prepares to ignite massive new trade wars.
A reasonable assumption? Not if People's bank of China Governor Gongsheng has anything to say about it. There are many reasons why Pan – and, for now, President Xi Jinping – want a stable exchange rate versus the dollar.
The dominant one is confidence. A big yuan decline might signal to global investors that there's an unseen major problem in Asia's biggest economy on top of a crippling property crisis, deepening deflation and massive capital flight.
The wildcard, though, is how Trump's coming trade wars might have Team Xi scrambling to make currency devaluation great again.
“Donald Trump's victory ... is ushering in a new phase of stress on the Chinese currency,” says Wei He, an analyst at Gavekal Research.
“The major question is what will happen if Trump starts to make good on his threats of new tariffs after taking office in January. In this scenario, it is highly unlikely that the renminbi will remain at its current level,” He said....
....MUCH MORE
Here's the exchange rate over the last month, via TradingView:
Up is weaker i.e. it takes more yuan to buy a dollar. 7.2806 last.
