Manulife Norinchukin Bank Holdings: China’s Yuan drops to eight-year low
(PRWEB) December 05, 2016 -- The strain on the Yuan has also been affected by the high probability of a Fed rate hike coming up in December and the growing uncertainty of the latest results of the U.S presidential election.
The People’s Bank of China (PBOC) has had control over the Yuan since March 2014, allowing the Yuan to move within a 2 percent threshold around its daily fix.
"We see the USD gaining strength, with rates being raised over in the US as soon as December this year; China can be impacted negatively by new tariffs being introduced by the end of January of next year. So in theory there is no real fundamental reason for CNY not to weaken." Said Edward Fraser, Head of Corporate Trading at Manulife Norinchukin Bank Holdings.
With a stronger U.S dollar it adds pressure on the emerging market governments and companies alike that would need to make a dollar-denominated debt payment. China being the largest buyer of U.S government treasuries has been selling off their holdings which in turn using the proceeds to support the exchange rate of the Yuan in the market.
This reaction may have been caused as an out lash after newly elected U.S President Donald Trump stated throughout his campaign that on the first day in office, he would present a 45 percent tariff on all Chinese imports.
Swift, one of the leading financial networks that are used by global banks to transfer capital stated on Wednesday, the Yuan’s share of world trade finance dropped to 4.61 percent, 50 percent lower then the last three years.
Contact: http://www.mnbholdings.com
Media Contact: Manulife Norinchukin Bank Holdings (MNBH), [email protected]
SOURCE Manulife Norinchukin Bank Holdings.
michael richmond, MNB Holdings, http://www.mnbholdings.com, +1 (647) 243-6005 Ext: 0, [email protected]
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