US labels China a currency manipulator
The US has labelled China a ‘currency manipulator’ exacerbating political and economic tensions between the world’s two largest economies.
In a move that will worsen its relationship with China, the US Department of the Treasury officially labelled the country a ‘currency manipulator’.
The announcement by US Treasury came in the wake of a steep decline in the value of the Chinese yuan against the dollar on Tuesday.
The dollar sits at 7.02961 against yuan as of 12:45 GMT on Tuesday, representing more than a 2% gain over the last two days.
US-China trade tensions worsen
Last week, officials in Beijing said they would respond to US President Donald Trump’s proposal to impose 10% tariffs on around $300 billion (£246.7 billion) worth of Chinese goods.
This week, the yuan breached the $7-dollar level for the first time since 2008, prompting the US Treasury and Trump to accuse China of manipulating its currency.
Chinese exports more affordable as yuan weakens
A weaker yuan puts China is a stronger position in the ongoing trade war with the US by making its exports cheaper and more competitive.
Officials in Beijing deny manipulating the yuan, with the People’s Bank of China (PBOC) blaming the currency’s decline on ‘"unilateralism and trade protectionism measures and the imposition of tariff increases on China’.
In response, the US Treasury Secretary Steven Mnuchin plans to meet with the International Monetary Fund (IMF) ‘to eliminate the unfair competitive advantage created by China's latest actions’.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Live prices on most popular markets
You might be interested in…
Find out what charges your trades could incur with our transparent fee structure.
Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.
Stay on top of upcoming market-moving events with our customisable economic calendar.