Around 11:05 a.m., the onshore yuan fell 0.15% against the American currency, to 7.2726 yuan per dollar.
The Chinese yuan took a hit on Wednesday, weighed down by Donald Trump’s threat to increase customs duties on imports from China, a country which he believes contributes to the presence on American soil of fentanyl, a synthetic drug.
“It’s probably for the 1is February,” declared the American president, referring to a 10% increase on Chinese products, the implementation of which would confirm his desire to launch the global trade war promised since his election.
The date of 1is February corresponds to that at which Donald Trump already plans to increase customs duties to 25% on products from Mexico and Canada, an announcement which had heavily weakened the Mexican peso and the Canadian dollar.
This time it is the turn of the renminbi, the other name of the Chinese currency, to give ground against the dollar: around 11:05 a.m. in Paris, the onshore yuan, exchanged in mainland China, fell by 0.15% against the American currency, at 7.2726 yuan per dollar.
Donald Trump justifies these possible customs duties by the fact that China sends “fentanyl to Mexico and Canada”, which according to him ends up being consumed in the United States. This synthetic drug, whose analgesic effect is 100 times more powerful than that of morphine according to the American Anti-Drug Agency (DEA), is at the origin of an immense health crisis in the United States.
“Limited effect”
The effect of this announcement is “limited”, however, notes Kathleen Brooks, of
-“When it comes to customs duties, investors believe that Trump barks harder than he bites,” she says.
The Republican had also announced during his electoral campaign “customs duties of 10 to 20% on all imports to the United States, whatever their origin,” recalls Michael Pfister, analyst at Commerzbank.
However, “the abandonment of this approach” in favor of case-by-case arbitration supposes, according to him, that “each time Trump announces customs duties on a country, other currencies which are not affected could initially outperform –at least until these countries are also affected.
The euro and the pound are therefore in the green against the dollar on Wednesday.
In this climate of “uncertainty emanating from the United States” particularly regarding their trade policy, gold is riding on its reputation as a safe haven, notes Ahmad Assiri, analyst at Pepperstone.
As a result, the yellow metal climbed 0.57% on Wednesday, to $2,760.60, around thirty dollars from its historic record at the end of October.
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