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Trump Calls Out Fed as Chinese Yuan Falls to Lowest Levels in a Decade

Donald Trump tweets again, this time about wanting more action from the Fed in response to the lowering of the exchange rate of the Chinese Yuan to the US Dollar by the Chinese central bank. According to TDS Securities, this recent spike above the 7.000 psychological area “appears to be a significant escalation of the ongoing US-China trade spat”. Donald Trump is apparently not amused by the action from China, calling it a case of “currency manipulation”.

Here is a quote taken from Donald Trump’s tweets:

“China dropped the price of their currency to an almost a historic low. It’s called “currency manipulation.” Are you listening Federal Reserve? This is a major violation which will greatly weaken China over time!”

With odds for a rate cut by the US Federal Reserve increasing after last Thursday’s implementation of 10% tariffs on Chinese goods, the renewed call for further action by Donald Trump may only pile more pressure on the FOMC to ease rates further come September 2019.

The Chinese Yuan operates under a managed float regime, where the People’s Bank of China adjusts the exchange rate of the Chinese Yuan Renminbi (CNH) as it deems fit, instead of allowing the value of the currency to be determined strictly by market forces (free float). The USDCNH is currently trading at 7.09044, having traded as high as 7.10910 during Monday’s Asian session.Don’t miss a beat! Follow us on Twitter.