The US-China trade war is heating up and well underway. China allowed the devaluation of its currency to fall to its lowest level against the dollar in more than a decade. The onshore yuan broke above 7 per US Dollar and traded at 7.05. Unfortunately, Trump wrongly accused China of manipulating its currency, saying in a tweet: “This is a major violation which will greatly weaken China over time.” What Trump fails to understand, and realize is that currency manipulation against the trend is impossible even for the USA.
What is easier to correlate is looking at Energy versus the FX markets when reviewing which country is manipulating its currency to attempt to damage a rival. It is not just currency, but ENERGY as well. This is the real effect of the current trade war and why ultimately the US wins. Highend Investors understand this and will eventually flow their capital to the US Indexes. Trump is much wiser than politicians and he realizes the longterm outcome will be a win for the USA share market.