Chinese yuan is feeling the heat as the possibility of an all-out trade war between the United States and China continue to grow. Last Friday, President Trump announced 25 percent tariffs on Chinese goods worth $50 billion, of which tariffs on $34 billion would go live on July 6th. China responded swiftly by announcing tariffs of equal measure. On Monday, in response to the Chinese government’s announcement of tariffs on $50 billion U.S. goods, President Trump said that his administration would impose 10 percent tariffs on $200 billion Chinese imports if China hits back against the $50 billion tariffs.
Chinese yuan has weakened to 6.484 per USD as of today as the trade war fear rises. It is down for the fourth consecutive day and reaches the weakest level January 2018.
Trade idea:
We expect the Chinese yuan to weaken further in the short term. So, we would like to urge readers go long on USD/CNH at the current rate of 6.484 with a target of 6.54 and the stop loss around 6.44 area.
