Posted on 06/12/2020 2:57:44 PM PDT by SeekAndFind
Compared to a basket of other currencies, the Chinese Yuan is falling fast. It has been dropping for a record 16 days straight, the longest run since the currency basket was created 5 years ago. It has now fallen 4 percent against the Euro and Australian dollar. The yuan has also been falling against the dollar but has stopped recently.
In late May, rising tensions with the U.S. contributed to the yuan falling to near its lowest level since 2008’s financial crisis and factors such as the Hong Kong protests and the US-China trade deal could increase the value of the American dollar again, pushing the yuan even lower. If the Chinese Yuan continues to fall, it would put a major strain on China’s entire economy.
Chinese international trade is also weakening. In May, exports fell to about 3 percent and imports plummeted almost 17 percent compared to last year. This is the biggest drop in 4 years. A large portion of China’s workforce is in the export industry, but the majority of the international orders were canceled during the pandemic. Official data shows the profits of China’s industrial firms fell almost 30 percent between January and April.
(Excerpt) Read more at theepochtimes.com ...
Excellent. Let’s see if we can crash it.
From South China Morning Post:
The decline in the currency suggests that the People’s Bank of China (PBOC) is tolerating a weaker yuan against its trade-weighted basket to support its exporters and economy as economic friction with the US escalates, analysts said.
A weaker yuan against a particular currency makes Chinese exports more affordable for foreign buyers in that country, which helps support growth at home.
In addition, downward pressure on the yuan could arise from a potential US decision to revoke Hong Kong’s status as a separate customs and travel territory from the rest of China, dampening foreign investment and re-export trade to the city.
“In the short term, it may lead to yuan depreciation pressure from the perspective of risk appetite and capital flows,” Huatai Securities said.
And continued US moves to punish China in the ongoing “tech war” could also dampen technology trade, giving Beijing further reason to let the yuan fall.
From South China Morning Post:
The decline in the currency suggests that the People’s Bank of China (PBOC) is tolerating a weaker yuan against its trade-weighted basket to support its exporters and economy as economic friction with the US escalates, analysts said.
A weaker yuan against a particular currency makes Chinese exports more affordable for foreign buyers in that country, which helps support growth at home.
In addition, downward pressure on the yuan could arise from a potential US decision to revoke Hong Kong’s status as a separate customs and travel territory from the rest of China, dampening foreign investment and re-export trade to the city.
“In the short term, it may lead to yuan depreciation pressure from the perspective of risk appetite and capital flows,” Huatai Securities said.
And continued US moves to punish China in the ongoing “tech war” could also dampen technology trade, giving Beijing further reason to let the yuan fall.
Good. Let them suck eggs.
Couldn’t happen to a nicer bunch of communist currency manipulators......
RE: Couldn’t happen to a nicer bunch of communist currency manipulators......
Well yes, that’s EXACTLY what they’re doing even as I type this.
So they can sell more of their contaminated crap to foreigners?
RE: So they can sell more of their contaminated crap to foreigners?
You might not like it, but we have NOT totally shifted our supply chain away from China. Despite Coronavirus, they are STILL our major suppliers of various (in your words ) crap that we buy, and that includes medicine and face masks.
So is it currency manipulation when they let it rise or let it fall?
When a country is a net exporter it wants a weak currency because it can sport more goods due to the lower costs to the buyers in other countries. That is how China gains market share at the expense of our manufacturers. It is a travesty.
We need to jack up tariffs on China even higher.
So their products sent here will be cheaper and keep our products made here less attractive as people are free to finally buy more.
China is azzhole.
You realize this will make imports from China cheaper and grow our trade deficit?
If we thought they were doing it on purpose we would be screaming about currency manipulation.
So yes, it is manipulation to restore markets lost to their overt perfidy...
We went shopping for a few things today. Came home with none of them because everything we found was made in China. We’ll either find a workaround or do without.
Not if we ban Chinese goods from our country, and ban American companies from doing business with any entity associated with the Chinese regime.
Does this mean i can buy a new chicom coffee machine for around a $1.50?
that would be good because my last one, a Chinese made Hamilton Beach lasted approximately 6 weeks before it died last week.
Been using Folgers Coffee bags till i buy a new one..
If banning trade with China happens thousands of US manufacturers will go belly up. Their entire production line is riddled with chicom parts from beginning to end including shipping materials.
Will they? Replace the parts. If you don’t someone will come along who can.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.