Macroscope | Why the US-China trade war could turn the heat on the Korean won and Australian dollar next
Neal Kimberley says an intensification of the US-China trade war, combined with Federal Reserve monetary tightening, could be double trouble for currencies in the Asian region
There’s a strong possibility that Trump is overestimating China’s economic discomfiture.
“We used a mathematical model to calculate the negative impact of the trade war,” former People’s Bank of China governor Zhou Xiaochuan told CNBC earlier this month. “It is not very large, it is not significant. It is less than half a per cent [of an] impact to the Chinese economy.”
On Friday, while acknowledging that “August activity data was a little mixed”, HSBC Hong Kong’s Julia Wang wrote that “on [a] positive note, it does not look as if either trade war rhetoric or tariffs have had much impact on China’s manufacturing sector.”
But what might that mean for currencies?