SHANGHAI: China’s yuan slipped and looked set for its sixth losing week, hurt by investor worries about higher tariffs following Donald Trump’s presidential election win though hopes that Beijing will roll out sizable fiscal stimulus kept losses in check.
As part of his pitch to boost American manufacturing during the election campaign, Trump said he will impose tariffs of 60% or more on goods from China.
Trump’s proposed tariff and tax policies are seen as inflationary and therefore likely to keep US interest rates high and undermine currencies of trading partners.
During Trump’s first presidency, the yuan weakened about 5% against the dollar in the initial round of US tariffs on Chinese goods in 2018, and fell another 1.5% a year later when trade tensions escalated.
“Trump’s ‘America first’ policy could extend the dollar strength and bring shocks to Asian currencies,” said Marco Sun, chief financial market analyst at MUFG Bank (China).
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