The Chinese Yuan tanked Tuesday night as Florida looked likely to be called in President Donald Trump’s favor.
The Yuan dip is a positive for China. As the Yuan falls in value, the ratio for RMB to USD increases, meaning $1 dollar could be worth multiple Yuan’s. This makes Chinese products more competitive in the U.S. and acts as a huge incentive for Chinese companies to export their goods to the U.S. A weaker RMB makes Chinese goods cheaper to purchase with other foreign currencies.
However, the dip is a double-edged sword and could drive up inflation as it makes exporting goods to China more expensive. (RELATED: ‘Diminish US Influence’: Policy Expert On What’s At Stake For Foreign Policy This Election)
According to a graph posted to twitter, prior to 8:30 when election results didn’t call Florida for either candidate, the RMB was worth close to .1505 USD but as Florida was looking to likely get called for President Donald Trump the RMB began a downward spiral, dipping below .1480.
Chinese yuan tanking pic.twitter.com/dtmJRQiIap
— Mike Bird (@Birdyword) November 4, 2020
However, one currency exchange site has the RMB at .149.
Trump has been tough on China, imposing tariffs on Chinese goods. In 2019, Trump retaliated against the Chinese government by increasing tariffs to as much as 30% on $250 billion of Chinese goods after China increased tariffs on the U.S.
The World Trade Organization ruled in September that Trump’s tariffs against Chinese goods are illegal.
Other currencies fell as Trump looked to claim more victories, with the Mexican peso also falling nearly 4% at one point and last traded at 20.905, according to Fox Business.
The euro also fell roughly 1%, while the Australian dollar lost .6% and the British pound fell .6%.