Trade war could become currency war depending on how China fights back

“[Exante Data’s Jens] Nordvig said there’s a 50-50 chance China could let its currency fall again. ‘Everybody is too relaxed that they’ve repegged the currency again. It’s never going to move,’ said Nordvig, warning if there could be a snap higher in the dollar. ‘Why would they help out Trump on the currency front. It doesn’t make any sense to me,’ he said.”

USAGOLD note:  Opinions vary about what China might do on the currency front, as this article points out.  As is the case with all the emerging countries, China will be concerned about capital flight.  The weaker the yuan the stronger the possibility of investors selling Chinese assets and buying assets in other countries including the U.S. and Europe – the situation to which Nordvig alludes.

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