The yuan lost ground in Asian trade on Tuesday to four-month lows against the US dollar, resuming losses after US President-elect Donald Trump vowed a 10% additional tariff on Chinese imports.

The impending escalation in US-China trade tensions led many global investment banks to reduce their forecasts for the yuan, in a time when China already faces considerable issues at home.

The Price

The US dollar rose 0.4% against the Chinese yuan to 7.2725, the highest since July 31, with a session-low at 7.2435.

The yuan closed up 0.2% on Monday against the dollar, the first profit in five sessions, after Scott Bessent’s nomination to the US treasury post.

The yuan lost 0.35% last week against the dollar, the sixth weekly loss in a row, marking the longest such weekly losing streak since May following a stream of weak data.

Tariffs

US President-elect Donald Trump vowed to raise tariffs by 25% on Canadian and Mexican products, and by 10% on Chinese products, citing concerns about illegal immigration and the drug trade.

Such a step would no doubt shock the market and weigh heavily on Chinese assets, especially exporting corporations. 

Trump has previously gone as far as promising a 60% tariff on Chinese imports, so it still remains to be seen what his actual intent and ceiling is. 

Yuan’s Previous Reactions 

During Donald Trump’s first term, yuan weakened by 5% against the dollar following the first round of US tariffs on Chinese commodities in 2018, with another 1.5% drop a year later as trade tensions grew.

Grim Outlook

Now investment banks expect yuan to fall by at least 1.5% to 7.3 against the dollar by the end of 2025.

Citibank’s analysts estimate that a 10-15% US tariff on Chinese imports would weaken the yuan by 1.5-2% at least.

A more aggressive 60% tariffs by Trump would lead to further uncertainty and struggle for China’s currency and the exporting industry. 

US stock indices rose on Monday as US treasury yields lost ground with investors assessing US President-elect Donald Trump’s nomination choices. 

Analysts believe the nomination of Scott Bessent for US Treasury secretary would boost the stock market, and could contain some of Trump’s more aggressive protectionist side. 

Bessent has previously called for a more gradual approach in raising US tariffs to avoid inflation hikes.

Later today, investors await the Federal Reserve’s last meeting minutes, and US GDP growth data for the third quarter.

Otherwise, US two-year treasury yields fell by over 6 basis points today to 4.307%.

US 10-year treasury yields fell by 11.5 basis points to 4.296%, while 30-year yields fell by the same amount to 4.483%.

On trading, Dow Jones rose 0.9%, or 420 points to 44,719 points as of 15:39 GMT, while S&P 500 rose 0.4%, or 26 points to 5996 points, as NASDAQ added 0.4%, or 80 points to 19,084 points.

International benchmark Brent fell in American trade on Monday away from two-week highs, on track for the first loss in three days on profit-taking, as traders assess the latest geopolitical risks. 

The severity of mutual missile attacks between Russia and Ukraine was reduced, which paved the way for calmness to return to eastern Europe, in turn reducing concerns about supply disruptions. 

Otherwise, Iran announced another round of negotiations around its nuclear program with western countries. 

Prices

Brent fell 1.25% today to $74.27 a barrel, with a session-high at $75.33.

Brent added 1.1% on Friday, the second profit in a row, hitting a two-week high at $75.37 a barrel on supply disruptions concerns from Russia and Iran.

Global oil prices rose 6% last week, the second weekly profit in three weeks, and the largest since late September. 

Geopolitical Risks 

The severity of mutual missile attacks between Russia and Ukraine was reduced, which paved the way for calmness to return to eastern Europe.

Last week, Russia launched an ultrasound rocket against Ukraine in a warning to the US and Britain after Ukraine utilized western made missiles in attacks on Russia. 

Iran’s Nuclear Program 

The Iranian foreign ministry said on Sunday it’ll conduct new talks about its disputed nuclear program with three European powers on November 29th. 

Bitcoin rose on Monday on track for the second straight profit, resuming the gains after a short hiatus and approaching the coveted record high of $100,000.

Bitcoin’s value more than doubled this year with a 130% profit year to date, on track for even more gains.

Bitcoin rose over 45% since Donald Trump’s election landslide on November 5th. 

Recent reports indicated that the social media company owned by Donald Trump is in talks to acquire the crypto trading company “Bakkt”, which would reinforce Trump’s alliance with the crypto system.

Otherwise, the MicroStrategy firm announced a new round of bitcoin purchases valued at nearly $5 billion, with the company’s total holdings of the cryptocurrency amounting to $29 billion.

Prices

Bitcoin rose 1% at Bitstamp today to $98,966, with a session-low at $97,017.

On Sunday, bitcoin inched up 0.25% and once again aimed at the recent record high of $99,800.

Bitcoin rose 9.1% last week, the fourth weekly profit in a row amid extensive investment demand from institutions and retail traders.

Trump 

The Financial Times reported that Trump’s media and technology company, which manages the Truth Social platform, is about to acquire Bakkt through a share swapping deal. 

Trump has vowed to found a supportive organizational framework for crypto assets, and a US bitcoin strategic reserve. 

MicroStrategy’s Purchases 

The MicroStrategy firm announced another purchase of 51,780 bitcoins valued at about $5 billion, making it the biggest crypto purchase by the company so far.

Microstrategy focuses on institutional programming, and has adopted a strategy of acquiring crypto assets, with their total bitcoin holdings reaching $29 billion so far.

The company announced plans to collect nearly $42 billion worth of bitcoin through the next three years as a method to diversify holdings and protect against inflation.

This prompted other listed corporations to take similar measures with bitcoin hoarding. 

That includes the mining company Marathon Holdings, Cosmos Health, LQR Pharmaceuticals, and others. 

Gary Gensler’s Stepping-down 

Investors welcomed news about the SEC Chief Gary Gensler’s stepping down from his post in January, as he was considered an enemy of the crypto industry. 

Gensler repeatedly accused the crypto industry of being rife with fraud and malpractice. 

Under his rule, the SEC took a harsh stance against crypto companies, on accusation of rule violation and money laundering. 

Trump is expected to appoint friendlier people to the posts at the SEC and other regulatory services.