Yuan hit by Trump39;s potential White House return, trade tariff threats
Chinese exporters hoard dollars, stashing money abroad
Authorities prefer weak yuan to protect export revenues
SINGAPORE, Oct 24 Reuters China39;s currency is feeling the pressure from a possible return of Donald Trump as U.S. president, not just from speculators shorting the currency but also mainland exporters who have been hoarding dollars.
The yuan has been weak since early 2023, bearing the brunt of China39;s anaemic economy and low yields. The heavily managed currency has spent the past 17 months on the weaker side of the 7perdollar level and fallen roughly 2.
Now, even as mainland stock markets celebrate Beijing39;s sweeping stimulus plans and investors rush back into the country, the prospect of Trump winning the November presidential election and his threats of bigger trade tariffs on China are heaping more pressure on the yuan.
It has weakened some 1.5 on a threeweek rolling basis, the sharpest such fall in over a year.
In the next 12 to 18 months, as China faces the prospect of higher trade tariffs from every direction, the easiest policy adjustment mechanism for the economy is likely to be currency depreciation, said Rong Ren Goh, a fixed income portfolio manager at Eastspring Investments.
It39;s a policy choice the country has made before.
During Trump39;s first presidency, the yuan weakened about 5 against the dollar during the initial round of U.S. tariffs on Chinese goods…