U.S — China trade: A key Currency View
Jun 3, 2019 · 6 min read
Summary: The U.S-China trade war has caused a dollar rally- driven by the dollar’s safe haven and trade characteristics- with the renminbi depreciating from Q4 2018. Nevertheless, the dollar has likely peaked! As China’s structural adjustments and trade substitution become more apparent, the Yuan is unlikely to depreciate towards the key 7.00 level. This is justified by the overemphasis of short-term economic disruption and dollar-centric narrative versus the economic implications of China’s supply chain adjustments and agility of global value chains (GVCs).
