When Donald Trump began lashing out at Beijing over its handling of the coronavirus pandemic, global currency traders’ attention snapped back to the exchange rate that last year aggravated tensions between the world’s two most powerful economies.
The renminbi has fallen by 0.5 per cent against the dollar since the end of April, when the US president asserted, without providing evidence, that he was “confident” Covid-19 emerged from a laboratory in Wuhan. Mr Trump suggested that imposing trade tariffs could be one way to punish China in response, and earlier this week ordered the main federal government pension fund to refrain from investing in Chinese companies as they present a national security “risk” to the US.
Such outbursts are piling pressure on the Chinese currency, investors say, overshadowing trade talks between the two superpowers and threatening the stability of other emerging markets whose currencies would be forced lower by a weaker renminbi.