SA expects decisive leadership from the president, including the fight against Covid-19 and holding his Cabinet to account, writes Mpumelelo Mkhabela.
Morning clouds. Mild.
Analysts at ANZ said that "the pace of diversification into other currencies will likely quicken going forward,” as the trade war rages on.
The Trump administration has formally labelled China a currency manipulator, further escalating its trade war with Beijing after the country’s central bank allowed the yuan to fall in retaliation for new US tariffs.
China’s yuan slid to the weakest level since May 2008, moving closer to the key level of 7 per dollar, as the central bank cut its daily fixing and on signs that a trade war with the US may escalate.
Money printing plants across China are running at close to full capacity to meet an unusually high quota set by the government this year.
Winds of change in currency markets have threatened to blow global investment trends further off course - but from the East as much as the West.
The onshore yuan has headed for its strongest weekly gain against the dollar in four months amid speculation that China’s central bank has been intervening to support its currency.
Donald Trump probably hasn’t followed through on campaign pledges to label China a currency manipulator because the yuan’s been stronger than he anticipated.
China has raised the exchange rate for the yuan against the US dollar by 0.92% from the previous day, the biggest one-day increase in more than 11 years.
As China’s yuan takes the first steps toward becoming a global reserve currency, Japan offers a lesson on how hard it is to rival the dollar’s supremacy.
Bitcoin surged to a two-year high amid expectations supply of the digital currency will shrink next month.
"For the rest of EM, RMB weakening carries contagion risk and adds to an already unsettled environment," wrote a team of economists at the IIF.
"Whilst Trump has never been the biggest fan of the IMF, he may very well be now!"
"What they’re doing is making up for the fact that they’re now paying ... hundreds of millions of dollars and in some cases billions of dollars into the United States Treasury," Trump told Reuters.
The yuan is heading for its longest weekly losing streak since its market exchange rate began in 1994.
China’s yuan has climbed to its strongest since December 2015, and analysts predict further upside given weakness in the dollar.
A selloff in Chinese stocks is threatening to end the yuan’s calmest period since its devaluation 20 months ago.
The dollar has strengthened and the pound extended its decline from Friday, while the offshore yuan had its biggest two-day drop since June.
The offshore yuan has inched lower toward 7 per dollar, widening its discount to the onshore rate to the most in more than two weeks.
A gauge of expected price swings in the offshore yuan dropped to the lowest level in a month as a cash squeeze eased and the Fed scaled back its outlook for higher borrowing costs.
China will give a $38bn investment quota to the US, as the Asian nation increases efforts to broaden use of the yuan overseas and lure capital back to the mainland.
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