Market Drives Yuan, Chinese Media Claims

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A row over tariffs between China and the US is fueling fears of a currency war. US President Donald Trump attacked the EU and China in a tweet, accusing them of manipulating their currencies. China was quick to deny the claim, and international financial institutions like the IMF said the yuan’s movement is in line with the market.

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Market Drives Yuan, Says IMF And Economists


Hello and welcome to insight. With me here coming to you live from Beijing CTCA we begin our program that was Krait tensions between China and the United States. It is fear that trade friction between the two countries will spiral into a currency war. President Donald Trump once again attacked the anti night in a tweet accusing them of manipulating their currencies. China was very quick to rebut the claim and international financial institutions like the IMF said the one moment is in line with the market. Our discussion here is what happened.

So far it lent short of the currency war. China's Foreign Ministry rejected theU.S. president's accusation of exchange rate manipulation saying market forces are driving the value of the Chinese yuan and India ease the value of China's currency depends on its demand and supply.

It is normal to see it fluctuate. Right now China's healthy economic performance can ensure the exchange rate of its currency is at a stable level. China has no intention of spurring exports through competitive devaluation of its currency.

That stance will not change the Chinese yuan has dropped significantly in recent weeks as trade tensions with the US have worsened. Mr Trump said China the European Union and others had been manipulating their currency and interest rates. He also slammed the Fed for raising benchmark lending rates which he said eroded America's competitive edge. However an International Monetary Fund said the Chinese yuan movement is in line with economic fundamentals. IMF and many US economists say Mr Trump's accusation simply doesn't hold water.

I don't see any evidence for currency manipulation. The exchange rate has returned to about what it was in the first half of last year. In fact I've seen that in looking at the dollar against many currencies the dollar looked weaker early this year and now the exchange rates of return to about where they were Middle's the beginning of last year. So I think that the change has been in the value of the dollar not in the value of the yuan or other currencies around the world and there's no evidence that it was manipulation.

Mr Trump's comeback tone has compounded fears of an all out trade and currency war though US treasury secretary Stephen Menuchin said investors should not be concerned about a currency war. The uncertainty created by escalating threats and counter threats are already having a negative impact on businesses.

The war on the create contingency effect on the currencies we are doing in our Beijing studio by some lose all who is the deputy director and senior fellow of the Centre for International Money thery Research University of China welcome sir program. Long time no see. Good to have you back in Asia. There are and as I and also in Beijing. These are shoes. How was the chief economist from Dillaway China. Welcome back. Also interested in Irvine California as we have done that Lloyd is the managing director and head of China with the head of equity capital markets at the boast that securities. Welcome sir. Let me start by asking you Professor Shen. Mr R and B why there are suspicions around the world about who was are China and the United States is likely to be in the war of currency. How likely from one to 10 is that likely to happen.

Of course there is a possibility that's likely I think in red light is very low. Why. Because you these days Arm B is depreciating.

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About the Author

Jacob Wolinsky
Jacob Wolinsky is the founder of, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at) - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver

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