China Draws a Red Line for the Yuan as Trump Risks Return
- The central bank is holding the daily fixing stronger than 7.2
- China is balancing the need to boost economy, protect currency
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A key level is starting to emerge for the yuan, as China tightens its grip on a currency that is facing fresh tariff threats from US President-elect Donald Trump.
The People’s Bank of China has consistently set its daily reference rate — Beijing’s preferred tool to guide yuan expectations — stronger than 7.2 per dollar since the US election, despite wild swings in the greenback and increasing predictions by analysts that the central bank would buckle. The PBOC set the fixing at a one-week high on Tuesday, pushing back against a widespread selloff versus the dollar after Trump took to social media to promise fresh tariffs.