adv-06 adv-06

The trade war between the United States and China has resulted in the historic devaluation of various countries


A day after the new tariff raise became operative, The Popular Bank of China reported 7,0883 yuan for the price of one dollar, the weakest number since March 2008. Overall, this strength of the American currency weakens the value of other currencies, specially the already weak ones, like the emerging economies. Turkey too has recorded a turbulent year for its currency. The political uncertainty of the country sank the value of its currency by 30 per cent in 2018 and another 10 per cent in 2019. Last August, the Turkish lira dropped by 12 per cent in less than 24 hours.

The euro too continues to weaken. The European currency dropped by the 1.10 euros bar, since 2017, its minimum number in 27 months. Fears of Germany in the technical recession and the threat of Brexit without deal the low of the currency.

Weakness of the euro will give a more competitive strength to the European exports but at the same time imports will become higher. It will also destabilise the external trade of devaluation, also historic of the sterling pound. Submerged in a downfall path because of its current political chaos, the drop of the British currency penalises European exports to the British market, the second in the region. The stock of the pound, that started the year over 1.27 dollars, dropped this week the 1,20 dollars bar, going to its minimum in three years.