Trump Says U.S. 'Not Ready' to Make Trade Deal with China

China further weakens Yuan to 11-year low after US blacklists Beijing as'currency manipulator

China further weakens Yuan to 11-year low after US blacklists Beijing as 'currency manipulator'

"Interest rate differential was an important factor leading the yuan depreciation against the dollar past year as yields between China and the United States shrunk sharply", he said.

The People's Bank of China sets the yuan's exchange rate each morning and allows it to rise or fall 2% during the day.

The International Monetary Fund sees little evidence that China's central bank has deliberately reduced the value of the nation's currency - a position at odds with the Trump administration's decision this week to accuse Beijing of manipulating the yuan.

The better-than-expected trade readings helped buoy Asian stock markets, which suffered a heavy selloff earlier in the week as the Sino-U.S. trade war intensified and the yuan skidded to 11-year lows. That followed President Donald Trump's threat of tariff hikes on an additional $300 billion of Chinese imports in a fight over trade and technology. Citing that the risks of a havoc-scale currency market volatility seemed to be out of sight in a near-term outlook, a senior FX strategist at TD Securities in New York, Mazen Issa said, "Last night fixed over 7 and markets seem to be taking that fairly well, so perhaps some calm is installed in the market at least for the very near term".

Economists say if the September 1 tariff hike goes ahead, the dent in Chinese economic growth could weaken the yuan to as low as 7.2 to the dollar.

Chinese state-run media Xinhua Finance predicted August 9 that the exchange rate will fluctuate in the near future, but wouldn't continue sliding, due to the lack of downward market pressure.

A weaker yuan makes Chinese exports more competitive, or cheaper to buy with foreign currencies.

"Chinese private buyers are not going to be making any USA purchases with a government ban in place", said Dan Basse, president of AgResource Co.

"The Federal Reserve and others have estimated the tariffs already in place will cost the average American household a US$1,000 increase in prices", he said.

"No I wouldn't do that", Trump said when asked if he wanted to devalue the dollar. Twelve rounds of talks have failed to end the impasse, and a Chinese delegation is expected in Washington next month to continue the negotiations.

China's exporters and their US customers have been whipsawed in recent months by trade uncertainties, with the fallout rippling through global suppliers from Germany to Singapore.

Tensions could spike further after the release of an interim USA rule for a ban on federal purchases of telecommunications equipment from five Chinese companies, including Huawei Technologies.

The yuan was the world's dullest currency only a few weeks ago, even as tensions with the USA on trade suddenly escalated.

"The Chinese government is trying to masquerade the impact that these tariffs are having on the Chinese economy".

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