China's yuan hits new lows, PBOC seeks to stem slide
Aug 07 2019
The People's Bank of China set the daily currency fixing stronger than analysts expected and announced the planned sale of yuan-denominated bonds in Hong Kong.
Former Under Secretary of State Bob Hormats on mounting US trade tensions with China and the USA accusing China of being a currency manipulator.
The responsibility of big countries is to provide the world with stability and certainty while creating conditions and opportunities for the common development of all countries, according to the editorial.
"Based on the historic currency manipulation by China, it is now even more obvious to everyone that Americans are not paying for the Tariffs - they are being paid for compliments of China, and the U.S.is taking in tens of Billions of Dollars!", tweeted Trump on Monday.
US Treasury Secretary Steven Mnuchin issued a statement after the value of the Chinese currency fell below the seven-yuan-per dollar limit.
Across the Atlantic, the Dow Jones Industrial Average plunged by more than 900 points as the panic spread to Wall Street in the worst day for U.S. stocks this year.
The yuan has tumbled 2.3% in three days since President Donald Trump's sudden declaration last week that he will impose 10% tariffs on $300 billion of Chinese imports from September 1, breaking a brief ceasefire in the trade dispute.
China placed retaliatory tariffs on USA -grown products including soybeans.
US law sets out three criteria for identifying manipulation among major trading partners: a material global current account surplus, a significant bilateral trade surplus with the United States, and persistent one-way intervention in foreign exchange markets. "The timing and apparent logic for Treasury's designation of China as a currency manipulator reeks of arbitrariness and retaliation, and will inflict further damage on an already wounded relationship between China and the U.S".
The Chinese central bank denied improperly manipulating the exchange rate.
Donald Trump has dropped the broadest possible hint that he is ready to dig in for the long term in the Washington's trade war with China, after the latest escalation in the long-running dispute between the world's two largest economies.
J.P. Morgan Asset Management APAC Chief Market Strategist Tai Hui said it was "another major setback to the possibility of a trade agreement".
This latest accusation by the U.S. government adds further fuel to growing political tension between the United States and China.
China's central bank weakened its central parity bank rate on Tuesday to the lowest level in more than 11 years, but by less than many analysts were expecting - suggesting the bank does not want to let the currency move too much.
A weaker yuan also might disrupt Chinese efforts to shore up cooling economic growth. It insisted that the yuan's exchange rate was now at an appropriate level in line with China's economic needs.
A steep fall in the Chinese currency had led the benchmark S&P 500 and Nasdaq record their sixth straight session of declines, losing at least three per cent each on Monday. There is a growing concern that exchange-market developments will be an excuse for yet more tariffs against China, or for the United States to start buying up Chinese currency.