Yuan Headed For New Low Vs. US Dollar?
The rally in the Yuan from January through mid-March has mostly been erased.
If the yuan continues to sink, protectionists in the US will howl.
Included in the protectionist group are Donald Trump, president Obama, Hillary Clinton, and Bernie Sanders, to varying degrees. Trump is the leader of the protectionist group.
Yuan Falls Most in Two Months
Bloomberg reports Yuan Falls Most in Two Months as Trading Resumes After Holidays.
The yuan headed for its biggest loss in two months as the currency traded for the first time since Wednesday.
The yuan lost 0.4 percent to 6.5879 at 10:04 a.m. in Shanghai, approaching a five-year low against the dollar. A gauge of the greenback’s strength climbed 1.1 percent when mainland markets were closed for holidays. The central bank set the reference rate 0.3 percent weaker.
“There is a high chance the yuan will break the January low,” said Wang Ju, senior foreign-exchange strategist at HSBC Holdings Plc. “The fundamentals for the yuan are weak: the economy is slowing and capital is flowing out of China.”
Yuan vs. US Dollar
The yuan is down about 8.5% since 2014.
With the exception of countries whose currencies are in trouble such as Brazil, Venezuela, Russia, and now China (the latter to stop capital flight), it’s difficult to find countries that believe a rising currency is a good thing.
Trump is seriously wrong when it comes to free trade, but that issue may very well win him the election.
Mike “Mish” Shedlock
Disclaimer: The content on Mish's Global Economic Trend Analysis site is provided as general information only and should not be taken as investment ...
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It's not like China wants the Yuan to drop. The issue is that the US economy is not doing well and the rest of the world's economy is doing even worse. When people in Europe are willing to invest money for a loss it shows you just how bad people think things will get. Debt itself is not expandable at the rate it is going right now let alone if economic growth shrinks.