USD/CNY: Yuan weakest in 6 years on Trump-led USD rally

The Chinese yuan slumped to the lowest levels since September 2016 on Thursday, as Trump’s presidency raised concerns over Trump’s intentions with regard to trade relationship with China. The new US president-elect Trump always targeted China for currency manipulation and has threatened tariffs of up to 45% on the country’s imports.

Moreover, a surprisingly positive market reaction to a Trump victory fuelled a broad based US dollar rebound, which further added to the rally in USD/CNY and prompted PBOC to weaken the Yuan fix for the fifth straight session today.

 Christy Tan, head of markets strategy in Hong Kong at NAB, noted "Trump has made his stance quite clear about China and it is definitely not a friendly outcome in terms of bilateral trade relations."

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