The Chinese yuan declined against the US Dollar on Wednesday after Reuters said Chinese officials might decide to leave their current exchange rate. “stable currency” Policy in response to tariffs by President-elect Donald Trump
Here, the key words are “stable currency policy.” It’s important to distinguish between “stablecoin policy,” China has it too (but this is a subject for another newsletter). China’s central banks is known for their commitment to keeping the yuan steady, but there are historical precedents of currency devaluations.
China had used it in both 2018 and 2019, during Trump’s first term. Devaluing the yuan against the dollar could make exports cheaper, which would offset the 10% tariff Trump said he was going to impose in his second term as president. But devaluation can also pose risks for the local economy. Theoretically, Chinese consumers may pay more for Chinese products, while foreigners would receive a lower price.
Chinese yuan dropped by 0.2% on Wednesday to reach 7.26 dollars. The yuan is down 2.4% year-to-date against the dollar.
This comes at a time when President Biden is planning to raise Section 301 Tariffs to target China’s cleantech sector during his last weeks as president.
“Many countries, when they’re faced with unilateral actions of that sort, look for ways to retaliate,” When asked today by Bloomberg about Trump’s tariff plans against China, US Treasury Secretary Janet Yellen replied that she was not aware of any. “My guess would be that [China] would do that.”
This story has just begun. Watch your email.
Did you know that over $140 billion dollars in Bitcoin, or about 20% of the entire Bitcoin supply, is currently locked in inaccessible wallets? Or maybe you have lost access to your Bitcoin wallet? Don’t let those funds remain out of reach! AI Seed Phrase Finder is here to help you regain access effortlessly. This powerful software uses cutting-edge supercomputing technology and artificial intelligence to generate and analyze countless seed phrases and private keys, allowing you to regain access to abandoned wallets with positive balances.
