China struggles to steady yuan as Trump’s tariffs roil markets

ANKARA

Beijing is working to stabilize its currency after US President Donald Trump’s latest tariff hike announcement rattled financial markets, driving the yuan down to its weakest level since January.

On Thursday, China’s central bank set the yuan’s reference rate against the dollar at 7.1889, marking its lowest point since Jan. 17, the South China Morning Post reported.

This move came as the yuan faced mounting pressure after Trump announced that he would impose a 10% tariff on all imports and levy even higher rates on goods from the EU, China, Vietnam, and Japan.

The Wednesday announcement sent shockwaves through financial markets, with investors flocking to safe-haven assets, driving gold prices to a record high. In response, Chinese regulators issued a warning about market volatility.

The offshore yuan tumbled to 7.349 per US dollar earlier in the day, its lowest level since February, following reports that the US would impose a 34% tariff hike on Chinese imports. However, by midday, the currency had slightly rebounded to 7.306 per dollar.

Meanwhile, gold prices surged, with spot gold reaching an all-time high of $3,167 per ounce on Thursday morning. This continues a months-long rally fueled by market uncertainty surrounding Trump’s return to the political stage.

In light of these developments, the Shanghai Gold Exchange released a statement cautioning traders about risks in the precious metals market.

The notice advised all members to heighten risk awareness, improve contingency strategies, and help maintain market stability. It also urged investors to exercise caution, manage holdings wisely, and make informed investment decisions, the South China Morning Post reported.