Market Outlook: Chinese Yuan Weakens Amid Trump's Threat to BRICS Nations

The Chinese yuan weakened in offshore and onshore markets following President Trump's threat to impose a 100% tariff if BRICS countries attempt to create a new currency to replace the dollar. Ken Cheung from Mizuho Securities Asia stated, "Trump's repeated tariff threats through social media highlight the role tariffs can play as tools for negotiation and issue resolution on the policy agenda." FX Strategy Director Ken Cheung also added, "This suggests that affected countries may need to tolerate further currency depreciation to mitigate the impacts of tariffs." The USD/CNH rose by 0.2% to 7.2748 after reaching an intraday high of 7.2774, the highest level in four months, during the early hours.