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KT Guttenberg, former German defense and economy minister under Angela Merkel, discusses the global impact of the 2020 elections and speaks on coronavirus shutdowns in Europe.
The Chinese yuan hit a more than two-year high against the US dollar, with traders taking into account Joe Biden’s prospect of victory and the stalemate caused by a potentially divided Congress.
The offshore Chinese yuan rose 0.4% on Monday to 6.5641 per dollar, reaching a level last seen in June 2018. The currency had risen 8.3% from May 27 to Friday as China’s economy was rebounding from its induced COVID-19. slow down.
A Biden victory is “positive for the Chinese yuan, as it is less likely to use tariffs as a political tool,” wrote Solita Marcelli, director of investments for the Americas, at Zurich-based lender UBS.
Biden has been cast as the winner of the 2020 election, although the results have yet to be certified. President Trump claims he won the election if every legal vote is counted and has filed lawsuits in several states alleging irregularities.
President-elect Biden is expected to review tariffs on $ 375 billion in Chinese goods passed by the Trump administration. Biden said he would put pressure on Beijing by forming a united front with the international community, a stark contrast to Trump’s trade war.
The United States and China reached a trade war ceasefire in January after the two sides signed a partial agreement that included promises from Beijing to purchase an additional $ 200 billion in U.S. goods over the course of the next two years, in addition to committing to end intellectual property. theft and manipulation of currency, among other measures.
The jokes between the two sides did not last long, as Trump accused Beijing of being slow to respond to the COVID-19 outbreak, which originated in Wuhan, China. The virus has infected more than 10 million Americans and killed at least 237,700 people while propelling the US economy into its deepest post-war slowdown.
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“As markets move beyond a clear analysis of the election outcome, they will then need to tackle more complex issues in the medium term, including getting more clarity on the positions of policy makers. in China and the United States, ”wrote a Goldman Sachs research team led by Zach Pandl, co-director of global FX, rates and emerging markets strategy. They see the yuan hitting 6.30 per dollar over the next 12 months.
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