SHANGHAI: China’s yuan surged to a 1-1/2-month high against the dollar on Friday and looked set for the best weekly performance since July, supported by US President Donald Trump’s suggestion that tariffs on China might be avoided.
In an interview with Fox News that aired on Thursday evening US time, Trump said his recent conversation with Chinese President Xi Jinping was “friendly”, and he would rather not have to use tariffs against China, though he called them a “tremendous power”.
“It went fine. It was a good, friendly conversation,” Trump said.
His tariff threats have been one of the key factors weighing on Chinese assets and market sentiment over the past few months.
During Trump’s first term as president, the yuan lost more than 12% against the dollar during a series of tit-for-tat US-Sino tariff announcements between March 2018 and May 2020.
“Trump continues to take a softer approach with China at this point after issuing the executive order to delay the ban on TikTok and suggesting a mere 10% tariff earlier this week,” Maybank analysts said in a note.
“His latest comments on ‘rather not have to use tariffs on China’ suggest his reluctance to do so and markets are likely to reduce bets on tariffs right now.”
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