The yuan has consistently weakened after the US presidential election Tuesday 8/11 with victory belongs to the candidate of the Republican Donald Trump.
Page CNN Money said Trump since he was elected president, the yuan constant prices. This downward trend continued till Tuesday (15/11), the renminbi exchange rate dropped to 1 USD 6.86 yuan - the lowest level since the darkest days of the crisis 2008-2009 global financial.
His victory Trump looms over relations between the two largest economies in the world. During the election campaign, he had threatened to impose taxes of up to 45% for Chinese goods and "labeling" China is a country a currency manipulator even on the first day working at the White House.
Calling China a manipulator rate actually just a symbolic move, but could increase the tension in US-China relations and become the first step in the process to apply punitive measures actually.
Effects of Mr Trump was elected president for the market may be causing headaches Chinese government.
The dollar rose against most other major currencies on speculation the US Federal Reserve System (Fed) will raise interest rates in December, the same ability to speed GDP growth and inflation in the US and increase in term Trum
Because the renminbi exchange rate is anchored to the dollar, so when the dollar rose, the yuan also rose against other currencies.
Evans-Pritchard Mr. Julian, an expert on China under the research firm Capital Economics, Beijing does not want the yuan, "according to the US dollar rose against other currencies," such as Chinese exports Korea will reduce competitiveness. Therefore, China was forced to allow the yuan to depreciate against the dollar.
In addition, Mr. Trump's guidelines on the application of aggressive trade policy with China has caused the devaluation pressure on the yuan to rise.
"They are in a very precarious state," said Evans-Prit comment on China just to "drop" rate, moderate "support" to the currency devaluation is not too strong.
If the yuan discount too strong against the dollar, the market is likely to fall into a state of panic as in April and May 1/2016 8/2015. Moreover, capital inflows from China in the context of the country's economy may decelerate faster flow of water if the local currency is depreciating too strong.
According to estimates by the Institute of International Finance (IIF), more than $ 450 billion has flowed out of China since the beginning of this year, up nearly 10% over the same period last year. On the way back, the divestment from China increased devaluation pressure on the yuan.
China "is trying to reduce the pressure slowly," Mr. Evans-Prichard said. "If they do not do that, they will have to face the situation as it was in mid-2015, when the yuan becomes too strong" compared with other currencies, leading to dumping move unexpectedly Central Bank of China in January 8/2015.
Since the devaluation of the yuan last year to now, Beijing had to spend hundreds of billions of yuan to intervene in the foreign exchange market to prevent the local currency depreciated too quickly. Although still the world's largest, foreign exchange reserves of China fell to its lowest level in 5 years.
Last October, the foreign exchange reserves of China fell to 45.7 billion dollars, the biggest decline since January, while 3,121 billion, the lowest since 2011.
Analysts expect the Fed warned that rising interest rates can attract more capital flows from China to seek higher profits in the US.
“We are facing a Monday divestment from China. This session will be greater than previous installments. Trump made his victory this getting worse "for China, an economist Kevin Lai of Daiwa Capital Markets, said.