The yuan weakened on fears of sharp tariff increases that the Trump administration could impose.
The Chinese currency fell to 7.33 yuan per dollar, reaching its lowest level since September 2023. This was reported by the Financial Times on Wednesday, January 8.
The yuan weakened to a 16-month low on strong economic data from the United States and fears of sharp tariff increases that the Donald Trump administration could introduce.
The domestic yuan rate fell to 7.33 yuan per dollar, despite the People’s Bank of China maintaining a stable rate ahead of Trump’s inauguration on January 20.
The yuan is allowed to fluctuate within 2% of the daily fixed rate set by the central bank, and the current exchange rate is nearing the lower end of the range.
The selling pressure was partly driven by concerns that Trump’s sharp increase in tariffs on Chinese goods would force the People’s Bank of China to weaken the yuan to offset their impact on exports. Exports are helping the country sustain economic growth amid weak domestic consumer demand.
Strong US employment and services data also boosted expectations that the Federal Reserve will cut rates more slowly than previously expected.
In China, on the contrary, they are using monetary easing measures to combat deflationary pressures. The US dollar index rose 0.5% after the data was released.
Chinese stocks also fell, with the CSI 300 index in mainland China losing 0.2% and Hong Kong’s Hang Seng index down 0.9%.
Let’s remember that Trump said that he spoke with the Chinese leader Xi Jinping through his representatives and that he believes in further understanding with the Chinese leader.
Source: korrespondent
I’m Liza Grey, an experienced news writer and author at the Buna Times. I specialize in writing about economic issues, with a focus on uncovering stories that have a positive impact on society. With over seven years of experience in the news industry, I am highly knowledgeable about current events and the ways in which they affect our daily lives.