Part 3/11:
The backdrop for these currency maneuvers is the ongoing trade conflict between the United States and China. What began as tariff negotiations has devolved into a form of economic trench warfare, with tariffs sometimes reaching as high as 145% on certain goods. These trade barriers have hurt China’s export sector, forcing it to reorient towards other markets and causing volatility in financial markets worldwide. Notably, the yuan has declined approximately 1.3% over a few weeks, reflecting waning confidence among global investors.