Yuan in the Fast Lane: Trade Tensions Keep It on the Bumpy Road
After a brief comeback, the offshore yuan is still biting the dust against the U.S. dollar, thanks to fresh trade sparks that’re making investors feel the heat.
Onshore vs. Offshore: The Fin-Press Struggle
- Onshore Liquidation: The yuan slid against the dollar as uncertainty swirled around what U.S. tariffs might actually do.
- China’s Counter‑Strike: A swift tariff response from Beijing just added more pressure, like a twin domino effect.
Export Boost vs. Investor Blues
Sure, a weaker yuan can give exporters a quick lift, but it’s also a warning shot that investors could be flying out. Unless the trade spat eases up, this downside risk hangs around like a bad hitchhiker.
Bank Fixing: A Daily Safety Net… That Isn’t Enough
The central bank’s daily fixer still tries to keep the currency’s expectations grounded, but trade tension whispers louder than its calm voice.
Bond Market: Worrying About the Big Picture
- With trade uncertainty in the air, investors might look for safer assets.
- That could cause yields to wobble if Chinese assets become a nightmare playlist.
- But if tariffs trigger a new stimulus vibe or policy changes, yields might stay on a tight leash, staying under the radar.
