China Yuan To USD: Beijing Sets Yuan Midpoint At 6.9996 Per Dollar

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HORSLEY: Lower currency does make Chinese goods cheaper on the world market and puts US manufacturers at a competitive disadvantage.

The yuan's moves over the past week are small compared with fluctuations of the euro and other major currencies.

The Chinese monetary authorities let the yuan fall past the closely watched seven-to-the-dollar level on Monday so that markets could factor in concerns around the trade war and weakening economic growth, three people with knowledge of the discussions told Reuters. Global stocks sold off in response and the Dow, S&P 500 and Nasdaq Composite logged their worst day of 2019.

The group's report - compiled from US Treasury and Census Bureau data - is the first look at the impact of the steep escalation of tariffs on US$200 billion of Chinese goods from 10 per cent to 25 per cent in May. Beijing also pledged to fight back if Washington goes ahead with the plan.

Markets.com chief analyst Neil Wilson said the trade war "has spiralled into a currency war - tariffs and currency are just the other sides of the same coin".

China's central bank said Tuesday it is "resolutely opposed" to such a label, and the bank's governor Yi Gang has long vowed it would not engage in a competitive devaluation. That would allow the currency to weaken to as much as 7.100 while staying within the 2 per cent trading band.

In what was seen as a counterattack after Trump's actions, Beijing allowed its tightly-controlled currency, the yuan, to slip to an 11-year low against the dollar. Meanwhile, given the darkening economic picture, the Federal Reserve is increasingly expected to indicate that it is ready to cut interest rates again.

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Mr Donohoe said the appointment of Mr Johnson as Prime Minister had "added a new dynamic" to Brexit talks. Trade Secretary Liz Truss is in Washington to meet figures including secretary of commerce Wilbur Ross.

This is the second time China has been designated a manipulator.

"It's really, really hurting us", said Yedi Vice President Bobby Djavaheri.

China Daily, a state-run daily newspaper, accused the US of "politicizing" the issue to "disrupt the normal order of worldwide monetary governance".

Amid a slew of videos clips of pundits Lou Dobbs and Jim Cramer praising Trump's stance against China, the president continued to pat himself on the back, claiming that "companies are coming to the U.S. in big numbers". Kudlow said on Tuesday the Trump administration wants to continue trade talks with China and is still planning to host a Chinese delegation for talks in September.

In a further sign of deteriorating ties, China's commerce ministry announced overnight that its companies had stopped buying USA agricultural products in retaliation against Washington's latest tariff threat. But it will be more hard to form consensus on industrial policy, technology policy, and standards and beliefs in commerce and trade.

"Exports still look set to remain subdued in the coming quarters as any prop from a weaker renminbi should be overshadowed by further U.S. tariffs and broader external weakness", said Julian Evans-Pritchard of Capital Economics. "What's missing now though is trust, and that's a tough thing to rebuild".

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