Despite the ongoing trade wars, where China just has to fight back, the local currency not only holds its end up, but also attacks skillfully. Just a few days ago, the yuan held an excellent five-day session against the US dollar. Seizing the moment when the greenback lost its appeal for a while and pulled back from the recent gains, the yuan began gaining ground.
Other circumstances were also favourable for the Chinese currency. Negotiations between officials of the two countries, albeit at the middle level, calmed investors down a bit. In addition, the dollar turned out to be under pressure after Donald Trump expressed strong criticism against the leadership of the Fed and protested against the interest rate hike. Such a difference in views resulted in the dollar’s decline.
Some experts associated the short-term outlook for this currency pair with the outcome of the recent negotiations between the US and China, but given the composition of official delegations, a breakthrough in the trade dispute is unlikely. This means that the yuan will not be able to resist the dollar for a long time. Meanwhile, China uses the yuan as a wise weapon in the trade conflict. Against this background, Trump's accusations of manipulating exchange rates appear to be convincing.
