Offshore yuan slides towards record low after Trump tariff threat
- The offshore yuan traded weaker on Friday, touching a low of 6.98 against the US dollar, close to its lowest level in two-and-a-half years
China’s offshore yuan fell to its lowest in eight months on Friday and was close to a record low after US President Donald Trump’s threat to impose new tariffs on Chinese imports.
The surprise threat, raising the prospect of all imports into the United States from China being hit with tariffs, also sent investors scrambling for the safe-haven yen, lifting it to a 16-month high against the dollar.
Trump said that a 10 per cent tariff would be imposed on US$300 billion worth of Chinese goods on September 1 after US negotiators reported no progress during trade negotiations in Shanghai, with the US president saying China had failed to live up to promises made in previous talks.
Traders say the offshore yuan is likely to continue its decent towards the record low and key psychological level of 7 against the dollar if the trade dispute intensifies further.
The yuan was last down 0.2 per cent at 6.9693 against the dollar after falling to 6.98, its weakest since January 2019 but close to the lowest in two-and-a-half years.
The Japanese yen was up 0.5 per cent at 106.82 against the dollar. It had earlier jumped to 106.76, its strongest since April 2018.