• Australian dollar falls toward a 7-month low, if it gets below 70.00 it will be the first time since February 2016
  • The Aussie, used as a proxy for the yuan, reached a near 33-month low at 70.22
  • Trump administration is concerned about the yuan’s depreciation and weighs whether to name China a currency manipulator
  • China’s response “China will never go down the path of stimulating exports by devaluing its currency,”
  • Trade actually doesn’t account for much of China or USA’s economy any more – exports are 20% of China’s GDP and 12% of USA’s
  • Trade between them is 2.5% China to the USA; 1% USA to China
  • The impact of trade wars on both economies will be small
  • Global trade won’t be affected much because the impact of a 10% tariff on half of China’s exports to the US has been offset already by the 8% devaluation of the yuan this year
  • The trouble is, the Aussie appears to be roadkill in these destructive trade wars and associated unpredictable consequences