The US dollar is on a roll. Over the past 30 months the dollar has risen by an average of 27 percent against major currencies on a trade-weighted basis. After falling throughout the 2000s, the dollar started its latest bull run in July 2014 – long before the election of President Donald Trump. His electoral victory only added fuel to the fire.
But yuan hasn’t been falling. The dollar has been rising. So why does Trump care so much about the dollar-yuan exchange rate in particular, when other currencies are even cheaper in dollar terms? And why does China care so much about the dollar-yuan exchange rate that it was willing to spend $1 trillion dollars to maintain it?
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Salvatore BabonesReturn Home