Sterling hits one-month high, yuan plunges to 11-year low

china yuan

The Pound is advancing across the board as the UK opposition leaders met today to plot to prevent a no deal Brexit.

Boris Johnson is sticking to his do or die Brexit mantra, however, he has expressed a little more optimism that a new deal can still be achieved between the EU and the UK. This comes following last week’s visits to Germany and France, during the G7 Summit Meeting, where Angela Merkel and French President Macron both said they are willing to listen to alternatives the Irish backstop.

Trump on Sunday added that Johnson was the “right man to deliver Brexit”, but Johnson reiterated that he will have “tough talks ahead”, but he is committed to an October 31 Brexit, deal or no deal.

Dr Kerstin Braun, President of Stenn Group, a global provider of trade finance, commented on the Yuan plunge:

The yuan is at its weakest level since 2008. Putting aside the question of whether Beijing manipulates its currency or not, there are real-world problems that can’t be masked. Growth is below expectation, with both industrial production and retail sales numbers soft from June to July. And while China has rolled out easing measures such as tax cuts, it’s clear that central banks can’t fully manipulate their way out of reality.

It’s getting harder to see how the US, who is still putting up solid results in terms of jobs, wages and retail spending, is going to come out of this trade war unscathed. The fissures are beginning to show – for example, this month’s US Steel layoff announcement, farm bankruptcies are 18% above last year, and job gains were much weaker than first reported, off by half a million.

I wouldn’t be surprised if, in an effort to spur domestic consumption, China ramps up its efforts to wean consumers off of global brands, which will hit top US companies like Starbucks and Nike, which rely on demand from China.

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