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Home https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ Business https://server7.kproxy.com/servlet/redirect.srv/sruj/smyrwpoii/p2/ China's currency is a strong US-China trade measure

China's currency is a strong US-China trade measure



China's currency has become an important measure for growth in US-Chinese trade deals, and now it has signaled that things are not fixed.

The question is whether that warning is meant, in to prevent the yuan from reaching a major psychological low of 7 in dollars. That level has become a sand line for markets around the world, and if damaged, it can trigger a negative reaction to world risk markets, as investors move to higher prices – economic impact from a longer, more contradicted trade war. [19659002] The yuan is somewhat stable this year, as the US and China bring trade talks. But since President Donald Trump's questions about new tariffs May 5, the world's yuan or CNY, lost 2.7% against the US dollar.

"It's clear that the trade talk we are talking about now is a full voice of trade war, so it's a very serious situation. Then we have a time of this negotiation, where it can be avoided and does not look so good to everyone, "says Jens Nordvig, CEO of Exante Data. "It's unclear if Chinese officials want to fight hard to keep the money stable. That's a question mark coming from now."

Onshore money, or CNH, working in Hong Kong and more affected by international entrepreneurs, reaches a high of 6.945, while the yuan on land, more than the central bank controls, is just above 6.91

Friday. Nordvig said that unlike other sessions, there was no sign of Friday that People's Bank of China tried to collapse the decline.

It is also unclear whether this is an intensified move, and Chinese officials respond to US trade and action tensions this week blocking Huawei's telecom firm from buying US elements.

A weaker yuan is a source of friction between China and the US for many years. Trump, in the past, accused China of neglecting its money, hurting the U.S. as a result. If China allows its currency to be weakened, its exports will be more attractive, but strategists say Beijing is worried about capital flight and it is likely that it will not be dangerous.

"The market is investigating the central bank's determination to defend the 7 stakes," says Marc Chandler, world-leading strategist at Bannockburn Global Forex. "They will do in a number of ways, through intervention, partly by washing liquids, raising the value of China's short-term money. They can do it in the domestic money market and in the local market Hong Kong. " [19659002] Nordvig said that the message sent by the yuan is not as positive comments about trade talks with US officials like Treasury Secretary Steve Mnuchin or White House's leading economist Larry Kudlow was made.

"It looks like they have not been invited to China. If there is no conversation in front of Trump and [President Xi Jinping] meeting in Osaka, the meeting becomes binary and very dangerous," says Nordvig. Trump and Xi are expected to meet on the sidelines of the G-20 June 28 meeting.

"It's very different if Mnuchin is doing some progress in some chapters here in the next two weeks. we are on the plateau, "says Nordvig, adding that the question is whether Chinese officials are liable for the money. "

Strategists say that the current weakness of the yuan is due to a dollar-boosting and trade-war disputes, which result in Chinese authorities taking into account the greater movements of fiscal and fiscal policy.

"It sells expectations of easier monetary policy and there seems to be no trade talks. China says we are not inviting the U.S. back, "Chandler said, adding that he expected the money to challenge 7 levels soon.

" I think we'll try it. We will try Chinese. This will be more anxiety as it is a tone of change if CNY or CNH gets 7. It will have a ripple impact on the markets. This is another source of instability. Another rubicon has been crossed, "he said.

Adam Cole, head of the G-10 foreign exchange strategy at RBC, reports that unnamed Chinese officials say the PBOC does not let the money trade by 7 indicate that such a transfer has won But he said that the yuan could have violated future levels.

"Longer terms, that the dollar is usually against to all, I think that the detention is no longer binding, "Cole said," is concerned with the positioning of money, cyclicality and the fact that the US economy looks stronger than any other part of the world. [19659002] China reduces Treasury's treasures, which some say may be a warning to the US But Cole said he did not believe that China, the largest Treasurys owner, would be liable for the market in a richer g way.

"It is a constant concern, as most people, we think the danger of China with a sudden devastation and conservation of Treasurys is unlikely. It is a case of cutting your nose across your face, giving how much China will lose, "he said.


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