Chinese Currency drops to historic lows.

[Always in His Presence]

Yuan falls to 2007 lows as US tariffs on China kick in​

SINGAPORE/HONG KONG, April 9 (Reuters) - China's yuan ended at its weakest level in more than 17 years on Wednesday after its offshore counterpart fell to a record low overnight, as an escalating Sino-U.S. trade war rattled currency markets.​

The onshore yuan finished the domestic trading session at 7.3498 per dollar, its weakest close since December 2007.​

"This will reduce China's GDP by somewhere between 1.0-1.5% depending on the extent of rerouting (exports through other countries). That's a larger hit than we had assumed but will probably be met with a further expansion in fiscal support."​

The offshore yuan pared losses and climbed about 0.7% to 7.3769 yuan per dollar in Asian trade, after sinking more than 1% in the previous session and hitting its record low of 7.4288 overnight.​

 

[Laodicean60]

Yes, and they have been printing money and selling treasures to support their economy. This is one reason I think Trump is backing off tariffs, we are still synchronized in global trade, and what happens to the #2 economy will affect the rest of the world and vice versa, the USA. The timing for Trump's tariffs is bad because economies around the world have been showing signs of weakness for a couple of years now.
Even in the USA, there has been talk of recession since 2023.

 

[essentialsaltes]

Since the US picked a trade fight with China, the two [remaining?] combatants are the two losers.

Uncertainty about U.S. policymaking has led to a flight out of the U.S. dollar and Treasurys in recent weeks, with the dollar index weakening more than 9% so far this year. Market watchers see further declines.

 

[Say it aint so]

No one wins trade wars.
The US dollar was heading the same direction as the Chinese Yuan.
That parachute that kept it from hitting bottom was Trump being talked into backing off his trade war measures.

 

[iluvatar5150]

I'm sure this is going to do wonders for the trade imbalance Trump wants to "fix". Their currency being worth less means their stuff is cheaper for us to buy and our stuff is more expensive for them to buy.

 

[Say it aint so]

I'm sure this is going to do wonders for the trade imbalance Trump wants to "fix". Their currency being worth less means their stuff is cheaper for us to buy and our stuff is more expensive for them to buy.

Yes. The Chinese have rightly or wrongly been accused of manipulating their dollar to keep it low for eons.
Given China has been banging out trade deals while we're still boasting "we have heard from....with not anything coming to fruition" maybe Xi will send Trump a flowery letter of appreciation.

 

[Nithavela]

Dollar not looking all that hot, either.

 

[Laodicean60]

Since the US picked a trade fight with China, the two [remaining?] combatants are the two losers.

Uncertainty about U.S. policymaking has led to a flight out of the U.S. dollar and Treasurys in recent weeks, with the dollar index weakening more than 9% so far this year. Market watchers see further declines.

Trump has wanted a weaker dollar because it makes us more competitive.

Breathing room to cut rates?​

Barring a few exceptions like the Swiss National Bank, a weakening U.S. dollar is a relief to governments and central banks around the world, analysts told CNBC.
“Most central banks would be happy to see 10%-20% declines in the U.S. dollar,” said Adam Button, chief currency analyst at ForexLive. He added that the dollar strength has been a persistent problem for years and poses a difficulty for countries with hard and soft dollar pegs.
With many emerging market countries having large dollar-denominated debt, a weaker dollar lowers real debt burden. Additionally, a softer greenback and stronger local currency tend to make imports relatively cheaper, lowering inflation and hence allowing central banks the room to cut rates to boost growth.

 

[essentialsaltes]

Breathing room to cut rates?
Barring a few exceptions like the Swiss National Bank, a weakening U.S. dollar is a relief to governments and central banks around the world, analysts told CNBC.

It's a relief to them because they can pay us back in dollars that are worth less.

With many emerging market countries having large dollar-denominated debt, a weaker dollar lowers real debt burden.

 

[Laodicean60]

It's a relief to them because they can pay us back in dollars that are worth less.

It also makes our exports more competitive. Our high dollar is crushing developing nations.

 

[Richard T]

Seems like their problems, currency etc., may only get worse. It was inevitable. Trade first went to Japan as they utilized and perfected how to insure quality in products. Then much of it rolled over to China where US companies were lured by the large internal market while the US government thought openness would expand capitalism and enhance human rights in China. Both companies and the government were wrong. Covid helped quicken the shift away from China and now it is going full blown. There are cheaper labor sources in other places than China. Everyone knows too that they copy and debase parts of nearly every joint venture from a Western company. I imagine they will suffer perhaps even more than the Japanese who had what most call a lost decade. Sure they try to beef up their markets in other places but they are quite stressed in trying to stimulate their own economy in the midst of a trade war. USA now is looking bad because our brand is tarnished from Trump's push for tariffs and his demeaning remarks to many. How quickly the tide can turn especially when man fails to look to God as his source.

 

[Laodicean60]

USA now is looking bad because our brand is tarnished from Trump's push for tariffs and his demeaning remarks to many. How quickly the tide can turn especially when man fails to look to God as his source.

Amen, you and I understand the signs of our times, and it pains me to watch it happen, remember Rom 13: 1-2. We need to trust in God in the future because the global economy is weakening, and extreme policies are being implemented. I hope the loon in government can recognise this, but I've been saying all along they are as dumb about economics as the American people.

 

[Always in His Presence]

But it is not about who is liked, or not liked - it is about doing what is best for the American Public and tax payers -

 

[Richard T]

Amen, you and I understand the signs of our times, and it pains me to watch it happen, remember Rom 13: 1-2. We need to trust in God in the future because the global economy is weakening, and extreme policies are being implemented. I hope the loon in government can recognise this, but I've been saying all along they are as dumb about economics as the American people.

I took off much of my short positions. Alot of the market rise is still due to how much the Federal Reserve spiked the money supply. So much optimism, Tesla showed me that. Timing is everything and I was getting too involved in trading anyway. So I will be more subdued. There is some bad news coming though and the clock is ticking on tariffs. Still it is hard to be single-minded on the direction in the short-term. Usually when i capitulate, I am wrong. I still have index funds short, and gold. but my leash is shorter.