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Yuan weakens sharply amid escalating trade war, counter-cyclical factor likely in play

The abrupt shift of the US-China trade talks and rapid escalation of the trade tensions between the two countries have thrown Chinese yuan into a round of sharp depreciation.

Analysts believe the recent daily fixing set the central bank shows that the couter-cyclical factor is already in play to support the currency and despite the mounting pressure, the chance for the yuan to break through the critical psychological level of 7 per USD is still small.

China on Monday announced plans to hike tariffs on $60 billion a year of US imports, after the US imposed higer tariff . . .

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