PCV notes that the closer the yuan tracks the dollar the less likely it is that President Trump will enact trade measures against China, a major talking point of his campaign.
May 25, 2017
‘China’s central bank is effectively anchoring the yuan to the dollar, a policy twist that has helped stabilize the currency in a year of political transition and market jitters about China’s economic management.
The yuan weakened more than 6% against the dollar in 2016; this year, it is up roughly 1%, and the expectation that the currency will fluctuate—a gauge known as implied volatility—is around its lowest in nearly two years.’