USD/CNH hits 7.40 for the first time as yuan continues to weaken

The US threatened additional 50% tariffs today and this looks like China’s response.

Today, Trump appeared to plead for a phone call from Beijing to de-escalate and now the White House is saying that Trump would be ‘gracious’ if China makes a deal.

Now you could certainly argue that the yuan is declining on the fundamentals, particularly that China doesn’t seem to be calling about a deal. Now it’s 1:30 am in Beijing so we might have to wait for Xi to wake up but you can see which way this seems to be going.

As I noted earlier, Trump hasn’t been shown to have signed any executive order that would put additional 50% tariffs on China.

This article was written by Adam Button at www.forexlive.com.