US-China tensions rise, adding further pressure to the offshore yuan
Trump’s seemingly provocative remarks about the ‘one China’ policy have angered Beijing
As US President-elect Donald Trump enters the Oval Office this week, tensions between China and the US have flared once again, adding further pressure to the offshore yuan and bringing a chill to Sino-US relations, analysts are warning.
Trump’s seemingly provocative remarks about the “one China” policy, regarding the status of Taiwan, has angered Beijing and sparked outrage among many.
With China warning it would “take the gloves of” if Trump continues to “impair” the “one China” principle, which China says is the political foundation of bilateral ties, tensions are certainly escalating between the two countries.
As Trump’s January 20 inauguration nears, analysts say risk sentiment will become increasingly fragile and the offshore Chinese yuan (CNH) will stay choppy.
The possible outbreak of a trade war between the world’s two largest economies, and retaliation from China including RMB depreciation, will cast a shadow over risk sentiment and put the CNH under pressure
“All eyes are on Trump’s inauguration speech this Friday,” said Ken Cheung, Asian FX strategist for Mizuho Bank. “Foreign exchange markets appear to be calm, but investors’ mood has turned jittery.”
