US Dollar Jumps Against Chinese Yuan After Trump Victory

The USDCNY exchange rate jumped after Donald Trump secured a second term as President of the United States. 

USDCNY - Daily Chart

USDCNY – Daily Chart 

The price of the USDCNY has jumped to resistance at 7.177 and could now look to target the August highs around 7.275. 

The price of gold fell and the US dollar surged after Donald Trump was elected back to the White House with a resounding win of 276 to 223. Gold fell more than 1.5% as uncertainty over the race was cleared. 

The US dollar also surged more than 1% against the Chinese yuan as traders prepared themselves for a return to tariffs against China. 

“While a stronger dollar and higher yields in a Trump win may be headwinds for gold, this will be balanced with potential safe-haven demand in the event of any trade tensions,” said Jun Rong Yeap, strategist with IG Asia. 

However, there are fears that Trumps’ policies could increase the federal deficit and that could increase the risk of inflation. 

If it’s a Republican sweep, including not only the Senate but the House of Representatives, “Trump’s ability to increase US government debt and push the deficit up is much greater,” said Marcus Garvey, at Macquarie Group. 

Trump made tariffs and tax cuts a key part of his election strategy, with a majority of voters saying the economy was the biggest issue in the election. Another important part of his platform was to initiate deregulation in areas from banking to cryptocurrencies

“Markets are basically thinking it’s pro-growth, even if it comes with higher inflation and higher interest rates,” said David Bianco, chief investment officer at DWS Group. 

The potential implementation of tariffs, which Trump has said he will increase by 10% on imports, and 60% on goods from China, will be a key theme for investors in the coming months. A study by Deutsche Bank said Trump’s victory would add about half a percentage point to GDP if tariffs are not implemented. Tariffs could subtract around a quarter of a point from GDP, the study added.  

“There are still going to be some question marks as to how aggressive Trump does go with tariffs,” said Garrett Melson, portfolio strategist at Natixis. 

The US dollar has risen across the world against other major currencies and the falling yuan could have an impact on China’s monetary policy going forward.

Recent News
Start Trading Now!

Try our demo account for free to learn trading. When you’re ready, switch to the live account and start trading for real.

Popular posts

ATFX

ATFX UK (AT Global Markets (UK) Ltd.) focuses on developing institutional business and professional investors and does not accept retail clients under its UK Financial Conduct Authority (FCA) license.

For professional client applications, please contact [email protected].

ATFX

🌍 Welcome to ATFX!

To provide you with the best trading experience in Iraq, please visit our localized website:

There, you’ll find all products, services, and contact information tailored specifically for you. Thank you for choosing ATFX!

ATFX

Restrictions on Use

Products and Services on this website https://www.atfx.com/en-ae/ are not suitable
in your country. Such information and materials should not be regarded as or
constitute a distribution, an offer, or a solicitation to buy or sell any investments.
Please visit https://www.atfx.com/en/ to proceed.

ATFX

使用限制

本网站的产品及服务不适合英国居民。网站内部的信息和素材不应被视为分销,要约,买入或卖出任何投资产品。请继续访问 https://www.atfx.com/en/

ATFX

Restrictions on Use

Products and Services on this website are not suitable for the UK residents. Such information and materials should not be regarded as or constitute a distribution, an offer, or a solicitation to buy or sell any investments. Please visit https://www.atfx.com/en/ to proceed.

ATFX

Restrictions on Use

Products and Services on this website are not suitable for the UK residents. Such information and materials should not be regarded as or constitute a distribution, an offer, or a solicitation to buy or sell any investments. Please visit https://www.atfx.com/en/ to proceed.

ATFX

Restrictions on Use

Products and Services on this website are not available for Hong Kong investors and not related to any corporation licensed by the Securities and Futures Commission in Hong Kong.

All the information and materials posted on this website should not be regarded as or constitute a distribution, an offer, solicitation to buy or sell any investments.

使用限制:本網站的產品及服務不適用於香港投資者及與任何香港證監會持牌公司無關。

網站內部的信息和素材不應被視為分銷,要約,買入或賣出任何投資產品。

ATFX

Restrictions on Use

AT Global Markets (UK) Limited does not offer trading services to retail clients.
If you are a professional client, please visit https://www.atfxconnect.com/