Bitcoin Shoots Up on Rising Threat of Full Blown Currency War as China’s Yuan Drops Below 7


  • China weaponize its currency and allows the yuan to drop below 7
  • The move experts say is to retaliate against President Trump’s additional tariffs
  • Beijing asked state-owned firms to suspend U.S. crop purchases
  • Global stocks drop while Bitcoin surges more than 10% to over $11,850

The simmering trade tensions between the US and China have threatened to spark a full-blown currency war after Beijing lets the yuan weekend past the psychologically important point of 7 to the American dollar for the first time in over a decade.

Beijing has consistently advocated the need for a higher yuan while President Donald Trump accused them of deliberating keeping its currency low to flood America with cheap products.

Now, PBoC has acknowledged that the Yuan plunging is due to market supply and demand, trade protectionism and expectations on additional tariffs on Chinese goods, reported Zerohedge. Meanwhile, the central bank will also crackdown on short term yuan speculation and anchor market expectations.

Beijing “Weaponizes” Yuan to Retaliate against Trump

China’s central bank has allowed the yuan to sink below the sensitive seven-to-one dollar level for the first time since 2008.

This, what Julian Evans Pritchard of Capital Economics expert said means, “PBOC has effectively weaponised the exchange rate,” had a bad impact on the Asia shares that slumped to a six-month low.

The yuan tumbled 1.3% to 7.0324 a dollar, compared with about 6.88 late on Friday.

“China is giving up on its softer diplomatic strategy and is no longer willing to be Trump’s punching bag,” said Chua Hak Bin, an economist at Maybank Kim Eng Research Pte. “Trump’s tariffs threats are backfiring and triggering a full-scale trade war.”

The move came after last week Trump proposed adding 10% tariffs on another $300 billion on Chinee imports from September 1, abruptly ramping up the war between the world’s two biggest economies.

A Threat of Full Blown Currency War

Now, the Chinese government has also asked its state-owned enterprises to suspend imports of US agricultural products, Bloomberg reported citing people familiar with the situation.

“What we really want to keep a look out for … is how this is then interpreted by the U.S. because Trump can always come back with their currency intervention slant on this,” said Vishnu Varathan, head of economics and strategy at Mizuho Bank.

Global stocks are tumbling in response, with shares slumping as much as 3.1% in Hong Kong and S&P 500 Index futures dropping as much as 1.3% before easing.

Dollar Index and Gold Rises, Bitcoin Soars

The Dollar index increased by 0.1% while Gold increased 1.1% to $1,456.70 an ounce.

Meanwhile, Bitcoin is enjoying the biggest gains, with 10.11% gains in the past 24 hours trading at $11,750 on Bitstamp.

https://twitter.com/joemccann/status/1158214574341939200

The leading cryptocurrency went as high as $11,867 which started the month at $10,000 and just a day before that was trading at $9,500.

The entire cryptocurrency market is in green with the total market cap going above $300 billion.

Bitcoin (BTC) Live Price

1 BTC/USD =$47,896.5747 change ~ -1.51%

Coin Market Cap

$892.93 Billion

24 Hour Volume

$14.78 Billion

24 Hour VWAP

$48.95 K

24 Hour Change

$-721.58

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