Today’s markets analysis on behalf of Konstantinos Chrysikos Head of Customer Relationship Management at Kudotrade
13th March 2025
The Chinese yuan remains relatively stable intraday as market participants assess escalating trade tensions, especially around U.S. tariffs and broader economic uncertainty. President Trump’s threats to expand tariffs on EU goods have sparked fears of a global trade war, driving risk aversion. While these concerns have prompted cautious trading, the yuan has held steady due to Chinese policymakers’ efforts to maintain a controlled exchange rate and hopes of economic support in addition to a weaker dollar. However, intensified tariff threats could pressure the yuan if global growth slows, reducing demand for the currency.
Meanwhile, the U.S. economy is grappling with trade tensions, and recession fears are mounting as tariffs dampen business and consumer confidence. This shift has capped U.S. government bond yields and could drive the dollar further down, benefitting the yuan. Traders could monitor new data releases to assess their impact on the market. In the US, the PPI figures could affect expectations regarding the direction of monetary policy and impact the dollar’s trajectory.