U.S. President Donald Trump has accused China and Europe of manipulating their currencies, raising fears that Washington will carry out repeated threats to impose tariffs on goods from the European Union.
. A weaker currency makes a country's goods cheaper, giving exporters a competitive edge.
"Our biggest concern here is that Trump will be minded to impose 'countervailing tariffs' on the European auto sector in coming months, justified on the premise that the Commerce Department has recently granted itself the power to do just this is response to what it deems to be countries that keep their currencies artificially depressed," said Ray Attrill, head of foreign exchange strategy at the National Australia Bank.
Trump had threatened as early as last year that he would slap a 25% tariff on car imports from the European Union.Trump's accusation of China manipulating its yuan is a longstanding one.accused Beijing of intentionally letting its currency slide lower"What surprises me is the timing," Sean Callow, Westpac Bank's senior currency strategist told CNBC on Thursday, referring to Trump's tweet. "I don't know why he's complaining about China right now.
In early trade on Thursday during Asian hours, the offshore yuan strengthened slightly to 6.8773, from 6.8847 the previous day. The onshore yuan bounced to 6.8691 against the dollar from 6.8806 on Wednesday.
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