The trade skirmishes between China and the US continued to show no signs of abating on Sunday evening and into Monday morning.
The latest episode in the battle has seen US President Donald Trump deliver uncertain remarks about his position.
On Friday, he said that planned talks between trade negotiators from the two countries might not go ahead as previously discussed. The talks, which are scheduled for September, are now in doubt. He also claimed that he was far from ready to agree to anything with the major Asian economy, with which he has been exchanging ever-higher tariffs on imports in recent months.
According to some market analysts, it is now possible that the next US presidential election, which is scheduled to take place in November of next year, is likely to come and go without any trade agreement being in place. This could have significant effects on US economic health, as it may mean that the economy contracts overall.
The situation is complicated further by the multiple currencies operated by China.
Its onshore yuan is manipulated by the Chinese government as part of its partly centrally planned economy, which means that rules of supply and demand do not work the same.
The currency which it trades with the outside world is known as the offshore yuan. On Monday morning, this was down against the US dollar. The dollar was trading at 7.1034 yuan over the course of the day. However, its future position depends on the actions of the Chinese administration.
Another poor performer over the course of the weekend was the British pound. It continued to freefall against other major currencies as concerns over Brexit and the performance of the country’s economy, which are in some ways interlinked and in other ways separate, continued to hammer home.
A data release which came out on Friday revealed that the British economy got smaller over the course of the second quarter of 2019. This was a shock to many analysts: while most had expected a drop from 0.5% to 0%, the actual result was 0.2%. Year on year, it fell to 1.2% – although it had been expected to fall to just 1.4% from its previous position of 1.8%.
Against the Japanese yen it was recorded 126.69. Two weeks ago, it was almost ten yen higher than this – suggesting that the move was deep and long-term.
Against the US dollar it was seen at $1.2020, and it is believed that its next move could be to under $1.20 – a psychological barrier which, if broken, could indicate severe problems for the currency.
Uncertain is the name of the game in Britain at the moment.
News reports in recent days have indicated that opposition leader Jeremy Corbyn may be about to call a vote of no confidence in Boris Johnson’s government when parliament reconvenes next month. Johnson may also choose to call a general election himself, although the timing of this around the supposed date of Brexit – October 31st – is still unclear.