Dec 11 Reuters Reuters reported on Wednesday that China is considering allowing the yuan to weaken in 2025 to brace for higher trade tariffs in a second Donald Trump presidency, citing people familiar with the matter.

Foreign exchange markets moved on the news, with the yuan falling about 0.3 to 7.2803 per dollar and Chinasensitive currencies such as the South Korean won and New Zealand dollar slipping.

The Australian dollar, which sometimes serves as a more actively traded proxy for the yuan, fell as much as 0.6 to a oneyear low .

Here are comments from market analysts and participants

JANE FOLEY, HEAD OF FX STRATEGY, RABOBANK, LONDON

It is a very interesting report, because it would fit with the theme of a slowing Chinese economy, and theme of 39;what is China going to do to push back against U.S. tariffs?39; Weakening the exchange rate, given that sort of backdrop, does have a very appealing logic to it.

And we know, of course, that politically, particularly if China does want to increase the reserve status of the renminbi, there is pressure on it to keep it firmer. But if they need to revitalise the economy, and they tend to be more interested on focusing on exports, there is quite a compelling logic that they may allow the renminbi to soften.

NICHOLAS REES, SENIOR FX MARKET ANALYST, MONEX, LONDON

News that China will allow the yuan to weaken as they prepare for Trump tariffs does not come as a shock this has been one of our highconviction calls…