Saturday , November 2 2024
Home / SNB & CHF / The US labels China a currency manipulator

The US labels China a currency manipulator

Summary:
The near-term impact will likely be limited but this is a clear negative for trade negotiations. Shortly after the renminbi’s sharp depreciation on Monday, the US Treasury Department labelled China a currency manipulator. This is the first time in 25 years that the US government has designated a country as a currency manipulator. According to the US Treasury Department, the decision was triggered by the perceived lack of action by the PBoC to resist the renminbi depreciation. Given that the US government has already imposed (or promised to impose) significant tariffs on virtually all Chinese imports while sanctions on some Chinese technology  companies are also already in place, the likelihood of

Topics:
Luc Luyet considers the following as important: , , , , , , ,

This could be interesting, too:

Guillermo Alcala writes USD/CHF slides to test 0.8645 support with US inflation data on tap

Swissinfo writes Swiss central bank posts CHF62.5bn profit

Nachrichten Ticker - www.finanzen.ch writes Trump-Faktor und Marktbedingungen könnten für neuen Bitcoin-Rekord sorgen

Charles Hugh Smith writes Is Social Media Actually “Media,” Or Is It Something Else?

The near-term impact will likely be limited but this is a clear negative for trade negotiations.

Shortly after the renminbi’s sharp depreciation on Monday, the US Treasury Department labelled China a currency manipulator. This is the first time in 25 years that the US government has designated a country as a currency manipulator.

According to the US Treasury Department, the decision was triggered by the perceived lack of action by the PBoC to resist the renminbi depreciation. Given that the US government has already imposed (or promised to impose) significant tariffs on virtually all Chinese imports while sanctions on some Chinese technology  companies are also already in place, the likelihood of additional aggressive action being taken by the US against China is low in the near term.

USD/CNY Spot Rate, 2000-2019

(see more posts on USD/CNY, )
The US labels China a currency manipulator

- Click to enlarge

However, the decision to label China a currency manipulator, which opens the door for a wide range of additional actions, is still a major escalation of the on-going US-China trade tensions. As a result, the likelihood of reaching a trade agreement may have been reduced further.

-Following the recent renminbi moves and the US government’s response, we have decided to revise down our forecast for rmb against the dollar to CNY7.1 from CNY6.95 previously for all time horizons.


Tags: ,,,,,,
About Luc Luyet
Luc Luyet
Luc Luyet has been working in the financial services industry for the last 12 years. For 8 years, he has been responsible for Technical Analysis for all asset classes and he was a member of a long only fund management team in one of the largest Private Banks in Switzerland and Europe. Do not hesitate to contact Pictet for an investment proposal. Please contact Zurich Office, the Geneva Office or one of 26 other offices world-wide.

Leave a Reply

Your email address will not be published. Required fields are marked *