on both sides jockey for survival. The question, though, is whether the US could persuade them to spend those. President, Donald Trump railed against what he called Chinas manipulation of its currency for economic advantage, even when that wasnt quite true. With the expectation that the Federal Reserve will need to tighten monetary policy further and faster, the.S. It appears that in order to make his trade war work, Trump is gearing up to launch a currency war as well.
How Would.S.-China Trade War Impact The USD?
Depending on how much it slides, it would offset most of the upcoming.S. If Beijing decides to let the currency slide further in value, its not clear when or where it would stop, which could spook Chinese savers and domestic stock markets and undermine the Chinese leaderships sense of control. And thanks to the larger scale of foreign investment flows into Chinese stocks and bonds, its more vulnerable than it was the last time capital flight was a worry, back in 2015. As China becomes less dependent on low-value-added exports, a weak yuan is no longer an advantage. But he cannot do both.