The price of the yuan against the dollar fell yesterday to lows of the last eleven years. The seven yuan barrier for each greenback was overcome, something that had not happened since May 2008, after the People's Bank of China related the fluctuations of the Asian giant's currency to the impact of US protectionist measures. . China's monetary maneuver unleashed the anger of US President Donald Trump , who did not hesitate to call the collapse of the Chinese currency "manipulation."

“China lowered the price of its currency to a record low. It is called monetary manipulation. Are you listening to Federal Reserve? This is an important violation that will greatly weaken China over time! ”, The US president said in his official Twitter account.

The sinking of the Chinese currency against the dollar came just days after the tenant of the White House threatened Beijing with imposing additional tariffs of 10% , worth 300,000 million dollars (270,582 million euros), to products Chinese from next September 1.

In response, the People's Bank of China (BPC) set a midpoint on the yuan exchange fork on the Chinese mainland market of 6.9225 yuan per dollar on Monday, the weakest exchange since December 2018, after which Chinese currency price plunged to 7.0501 yuan per dollar, 2.2% below the crossover recorded in the previous session and the worst change in Chinese currency since May 2008.

"We, like most of the consensus, have been reluctant to forecast a figure above 7 for the dollar / yuan crossing, at least while trade negotiations were ongoing, assuming this would immediately lead to their collapse," he acknowledged. Robert Carnell, chief economist and head of research for Asia Pacific at ING.

"It is probably fair to assume that today's measure [for yesterday] was a deliberate decision, and part of what we imagine will be a concerted series of steps to reverse the latest US tariffs," added the expert in reference to the authorities Chinese no longer see the need to limit the tools at their disposal and "the currency is now also considered part of the arsenal," according to Europa Press.

However, the ING analyst is cautious and stresses the need to take time "before concluding whether it is a gesture of defiance or the beginning of a concerted monetary movement."

For his part, Bart Hordijk, from Monex Europe, believes that the yuan will continue to weaken, but in a controlled and gradual manner , adding that an excessively unstable currency, despite the benefit that could have an impact on exports, can cause capital leaks such as those registered between 2015 and 2016, in addition to complicating the opening of the bond market to foreign investors.

Be that as it may, this new episiod of tension between the US and China ended yesterday with a new day of losses in most of the world stock exchanges, including European ones. The selective Spanish lost 8,800 points, with a fall of 1.35%, and signing its worst record of the last seven months.

Ibex loses 8,800

The Spanish Stock Exchange has lost 1.35% on Monday and has been below the 8,800 points harmed by the fall of international markets due to the commercial war between the United States and China, whose currency has depreciated more than 1, 5% in this session.

Thus, with the profitability of the Spanish long-term debt at 0.24% (this morning it fell to the historical low of 0.207%), the main indicator of the national stock exchange, the IBEX 35, has fallen 120.4 points, the 1.35% , up to 8,777.2 points, an unknown level since last January 7. Annual earnings are reduced to 2.78%.

While the price of the euro stood at $ 1,119, all major European plazas have fallen: London 2.47%; Paris 2.19%; Frankfurt 1.8% and Milan 1.3%.

The Spanish Stock Exchange has registered losses since the beginning of the day, although initially it tried, without succeeding, to recover the closing levels of last Friday.

The national parquet, which lost the height of 8,800 points an hour after the opening, was still affected by the fall of international markets after last week the US president, Donald Trump, announced the imposition of 10% tariffs on Chinese products

The Spanish Stock Exchange was harmed by the fall of Wall Street on Friday, as well as the decline in Asian markets this morning (the Hang Seng lost 2.85% and Nikkei 1.74%), largely due to the depreciation of the yuan, which was changed to more than $ 7.05 (6.94 units in the previous session), which had not happened since April 2008 and could have been by intervention of the Chinese Central Bank.

The decline was accompanied by the decline in European places and the bad economic data, as activity decreased last month in the services sector in the euro zone, Germany and Spain.

Given the stock market decline, the price of gold continued to rise (the ounce was changed to more than $ 1,450, the price of May 2013), while the barrel of Brent oil fell more than 2% and stood at $ 60.5 and the profitability of the debt continued to decrease (the 30-year German bond registered a negative return) to historical lows.

The downward opening of Wall Street and the increase of its losses above 2% (the Dow Jones Industrial index fell from 26,000 points and the S&P 500 of 2,900), partly due to the fall in activity in the sector American tertiary, which stood at 2016 levels, prevented the Spanish parquet from recovering 8,800 points.

President Trump accused China of manipulating the price of the yuan, which caused fear of a worsening trade war.

All large values ​​fell: Inditex 2.44%; Telefónica 1.77%; Repsol 1.7%; Santander Bank 1.53%; BBVA 1.37% and Iberdrola 0.21%

The biggest drop in IBEX companies has corresponded to ArcelorMittal, 4.31%, while Masmóvil yielded 3.25% and Indra 2.99%.

Only six IBEX companies have risen: Acerinox 1.29%, followed by medium-sized banks (Banco Sabadell 1.19%; Bankinter 0.86%; Bankia 0.52% and Caixabank 0.5%) , while Naturgy advanced 0.09%. Endesa repeated a quote.

In the continuous market, where about 350 million euros had been traded, the fall of 9.33% of Gam and the rise of 15.29% of Coemac stood out.

According to the criteria of The Trust Project

Know more

  • China
  • U.S
  • Donald Trump
  • Iberdrola
  • London
  • Naturgy
  • Paris
  • Inditex Group
  • BBVA
  • Stock Market Chronicle

Macroeconomics The fall of the pound shakes Johnson's hard Brexit

Macroeconomics The IMF cuts global growth due to the US-China trade war and Brexit

United KingdomMay, Johnson and Hunt call Donald Trump's comments on congressmen "unacceptable"