“Are you listening Federal Reserve?” – was Trump’s response to the falling Yuan with the president of the United States not quite clarifying what exactly he wants Fed to do.
Previously he has suggested Fed should start money printing, or quantitative easing as they call it, as Trump gets outmaneuvered by China which has met his tariffs with Yuan devaluation, so cancelling them off.
Tensions are also continuing in Hong Kong where their money is close to crossing 8 HKD to USD.
Bitcoin has jumped on all this devaluation going around, nearing $12,000 once more as the currency acts like gold: a safe asset to hedge the falling value of fiat money.
Pound too has fallen against the euro to now €1.08, with stocks and much else in red today except bitcoin and gold.
Fed’s chairman has already shown deference to Trump by cutting interest rates, but it’s not clear whether they would fall to an outright currency war which might bring the euro into the fray.
Nor is it clear just how low CNY will go, but the next response in this tit for tat might be raising those 10% tariffs to 25%, with perhaps more CNY devaluation, as everyone then holds their breath for America’s decision in the 2020 election.