Top Chinese bankers in London are warning of the drama that would follow any US attempt to weaken the dollar by intervening in renminbi markets — a move that would be seen by Beijing as a “political act”.
The risks of such action have heightened since June, said analysts, after US president Donald Trump repeatedly took aim at China and Europe for “playing currency games” as trade wars threatened to spill over into foreign exchange markets.
The US Treasury officially branded China a currency manipulator this month after the Chinese central bank allowed the renminbi to fall below Rmb7 to the dollar, a key threshold last breached in 2008, leading to further escalation in trade tensions. On Thursday the renminbi was trading at a fresh low of 7.0749.