© Reuters. Yuan slipped on Friday while the dollar was little changed
Investing.com – The yuan slipped on Friday while the dollar was little changed as the .
U.S. President Donald Trump confirmed that the tariffs would kick in at 12:01AM ET (04:01 GMT) on Friday. Trump told reporters that another $16 billion are expected to go into effect in two weeks, and that he is considering to impose additional tariffs on $500 billion in Chinese goods if Beijing retaliate.
First “34, and then you have another 16 in two weeks and then as you know we have 200 billion in abeyance and then after the 200 billion we have 300 billion in abeyance. Ok? So we have 50 plus 200 plus almost 300,” Trump said.
“It’s only on China,” he added.
The pair climbed 0.32% to 6.6577 on Friday. Traders’ focus have now shifted to how China reacts as markets fear the potential volatility would cloud the global economic outlook. Chinese officials have said earlier that it would retaliate against Trump’s tariffs on Chinese goods.
“The chances are slim for China and the U.S. to reach an agreement on trade issues, and trade war worries will be a long-term uncertainty for at least the next two years,” said Yan Weixiao, an analyst with Founder Securities.
Li Liuyang, senior foreign exchange analyst at China Merchants Bank in Shanghai, said the yuan market should not see huge volatility because the development so far were all expected. “Investors know what’s going to happen and it has already been priced in,” Li said.
“The market will pay attention to any follow up, whether Trump escalates further, or anything unexpected happens.”
Gao Qi, FX strategist at Scotiabank, said in a note on Friday. Qi added that he expected the Chinese authorities to step in to prevent the yuan from sharply depreciating, if need be.
“We see a strong resistance of 6.70 for now and the 6.90 level seems China’s bottom line for the yuan exchange rate. The yuan will certainly face intensifying depreciation pressure again going forward if China fails to de-escalate trade tensions with the U.S.,” he wrote.
Meanwhile, the , which tracks the greenback against at basket of six major currencies, was down 0.02% at 94.11 on Friday after slipping to 94.177, its lowest since June 26, the previous day.
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