BEIJING–China’s yuan dropped below Monday’s politically delicate point of seven to the U.S. dollar, potentially adding to Washington’s trade tension.
On Monday, August 5, 2019, China’s yuan dropped below the politically delicate point of seven to the US dollar, potentially adding to Washington’s trade tension. The currency in early trading after the U.S. declined to 7,0177. President Donald Trump’s last week threat of higher tariffs on extra Chinese imports in a battle against Beijing’s trade surplus and technology policies
In early trading, the currency weakened to 7,0177 following last week’s threat of tariff hikes on extra Chinese imports from President Donald Trump in a battle over Beijing’s trade surplus and technology policies.
One of a series of U.S. complaints that fuel tensions with Washington is the yuan’s weakness. American authorities complain that a weak yuan makes exports to China too cheap, hurting overseas rivals, and swelling the trade surplus in Beijing.The amount of seven yuan to the dollar has no financial importance, but the exchange rate could be revived by the US.
The U.S. Treasury Department declined to label China as a currency manipulator in May, but said it watched Beijing carefully.By making them less costly overseas, Chinese leaders have pledged to prevent “competitive devaluation” to increase exports. But regulators are attempting to create the government-controlled exchange rate more responsive to market forces, pushing down the yuan.
The yuan, also known as the renminbi, or “people’s cash,” has lost 4% since reaching a 6,6862 dollar high in February.