Yuan falls to two-month low due to tariff risks

The yuan fell to a nearly two-month low on Wednesday as yields fell in China and yields rose in the United States, and as traders grew nervous about the prospect of Donald Trump’s presidency, which announced steep tariffs on Chinese exports. The Chinese currency was down about 0.1% in morning trade at 7.1341 per dollar, its weakest since late August.

The yuan has fallen 1.5% against the dollar this month. It is seen as one of the most vulnerable assets if Republican Donald Trump becomes US president. Analysts estimate it could weaken to 7.3 per dollar or even lower if Republicans also gain control of Congress on November 5. but forecast markets – perhaps skewed by some unusually large deals – show Trump’s chance of winning at nearly 63%, versus 37% for Democratic rival Kamala Harris.

“It makes the market a little nervous about tariff risk,” said Bank of Singapore analyst Moh Siong Sim, although from a statistical perspective “it’s still a coin toss.” At the same time, China on Monday cut lending rates to support the economy, while in the US bond yields rose as traders backed off bets on an aggressive cut in short-term interest rates, linked to both Trump’s prospects and a strong economy. .

In offshore trading, the yuan remained stable at 7.1383. The central bank fixed the average rate around which the yuan is allowed to trade in a 2% corridor at 7.1245 per dollar.

China’s Finance Ministry said Wednesday it will issue 5 billion yuan ($700 million) in yuan-denominated bonds in Macau on Oct. 30. The 10-year yield remained mostly stable at 2.15% versus 4.22% in the US. Key levels on land and sea:

* Onshore USD/Yuan overnight swap -6.50 pips vs. offshore -6.50 * 3-month SHIBOR 1.9% vs 3-month CNH HIBOR 2.4% LEVELS AT 03:10 GMT CURRENT INSTRUMENT UP/DOWN (-) % CHANGE IN DAY’S HIGH DAY vs. USD vs. LOW CLOSING FOR PREVIOUS YEAR FROM BEGINNING % Spot Yuan 7.1287 -0.08 -0.38 7.1287 7.1341