Posted on 08/05/2019 2:01:55 PM PDT by Red Badger
Both the onshore and offshore yuan breached the 7.0 level against the dollar, which investors see as a key threshold in currency value China's decision to let its currency weaken against the dollar on Monday sent global markets diving further into the red and provoked a Twitter tirade from US President Donald Trump.
The deteriorating picture appeared to worsen as official Chinese media reported Beijing ceased purchases of American farm exports.
The Chinese yuan fell to its lowest level against the dollar since August 2010 in morning trading on Monday, fuelling speculation that Beijing is allowing currency depreciation to counter threatened US tariffs.
US President Donald Trump reacted angrily later in the day, accusing China of deliberately and improperly weakening its currency.
"China dropped the price of their currency to an almost a historic low. It's called 'currency manipulation.' Are you listening Federal Reserve?" he said on Twitter, calling the change "a major violation" which would "greatly weaken China."
Near 1335 GMT, the offshore currency weakened to 7.1114 to the dollar -- the worst since 2010 -- days after Trump announced a plan to impose fresh tariffs on another $300 billion in Chinese goods, sharpening trade war tensions between the world's two biggest economies.
The onshore yuan also tumbled, hitting 7.0536 in Monday morning trade to reach its lowest level since 2008.
Global equity markets were in selloff mode, with major indices in Asia, Europe and the United States down two percent or more.
(Excerpt) Read more at afp.com ...
Heck! Just increase the tariff by the same percentage of the Chinese currency devaluation. Problem solved.
Exactly!............
Let me get this straight:
If you De-Value your Currency overnight it is BAD
If you slowly De-Value your Currency over 12 months it isn’t BAD??
Isn’t Central Banking wonderful? The federal reserve corporation, a Private Entity, has been DEVALUING Our Currency on an annualized basis since 1965, and they really stepped it up in 1971.
Let’s wait and see President Trump’s response.
We could just ban Chinese imports, Walmart and Target be d@mned.
This not a maneuver from strength. It is stick your fingers in the dike time. And every day a new hole opens up. If they are trying to hang on until 2021, they will find themselves extremely weak and still having to deal with President Trump.
Saying that the yuan ‘fell’ may be a fact, but it sure ain’t the truth. It ‘fell’ because Beijing dropped it.
“This not a maneuver from strength. It is stick your fingers in the dike time. And every day a new hole opens up. If they are trying to hang on until 2021, they will find themselves extremely weak and still having to deal with President Trump.’
And they’re not out of the woods on the home front either. Look what’s happening in Hong Kong (sp?) They are in all but out and out revolt. Big companies are pulling out, they’re putting up their last defense. If the enemedia let’s Trump do what’s right China’s toast.
but, but, but, I thought a “25% tariff would raise prices 25% for the American Consumer...”
Yeah it hurts us a bit but it REALLY hurts China.
Think of the money pouring into the US Treasury right now! Budget deficit hawks please take note.
Apparently they really prioritize maintaining a trade surplus.
They are constraining imports from Asia as well.
Their trade surplus seems to viewed as very important or critical. With a trade deficit, they would run down their foreign reserves, and possibly become unable to rescue their markets and/or currency from imploding.
The President may have known the right lever to use on them after all.
It seems we are now at war.
Yes! HUGH revenue in fiscal year 2019!
Tariff revenue is going to TRIPLE this year to close to 100 billion dollars!
Most of it ‘paid’ by China.
NOT American consumers.
“The President may have known the right lever to use on them after all.”
Seems to me the President set a trap for them, and they fell for it hook line and sinker. Now they have to defend against being ‘currency manipulators’.
In addition they are misinformed that, and are counting on, American Farmers are going to turn on Trump and vote democrat.
“It seems we are now at war.”
We’ve been at war with them for 20 years, now that Trump is president, the battle in enjoined.
China is closer to Venezuela than many think.
Once upon a time, when there were a billion poor farmers and a small number of relatively wealthy Party members China could get away with just about anything domestically.
Now that there is a new wealthy class and a business class and the start of a middle class they will be VERY angry once it goes “poof”.
And they have options stronger than a rice paddy rake.
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