# China lets yuan break key 7 level for first time in decade as trade war worsens

> China let the yuan break the 7-per-dollar level for the first time in more than a decade, falling about 1.4% on August 5, 2019. The move came days after Trump announced 10% tariffs on the remaining $300 billion of Chinese imports, ending a brief ceasefire.

- Date: 2019-08-05 · published 2019-08-05T12:00:00.000Z
- Category: trade · region China · magnitude high
- Page: https://feedsoft.ai/events/5368-china-lets-yuan-break-key-7-level-for-first-time-in-decade-as-trade-war-worsens
- Commodities: [Soybeans](https://feedsoft.ai/c/SOY.md), [Chinese Yuan (CNY per USD)](https://feedsoft.ai/c/USDCNY.md)

## Why it matters

A weaker yuan makes Chinese exports cheaper and raises the cost of US farm goods for Chinese buyers, which pressures US soybean demand. The escalation also points to further retaliation risk for US agricultural exports.

## Read by commodity

- SOY: bearish ▼
- USDCNY: bullish ▲

## Linked price moves

| Commodity | Date | Window | Change % | z-score | Why linked |
| --- | --- | --- | --- | --- | --- |
| USDCNY | 2019-08-05 | 1 | +1.6% | 6.6 | China let the yuan break 7 per dollar on Aug 5, a drop of about 1.4%, after Trump's new 10% tariffs on $300B of goods, which directly explains the move. |
| USDCNY | 2019-08-07 | 5 | +2.6% | 3.9 | The PBOC let the yuan break 7 per dollar on Aug 5 (about 1.4% in one day) after Trump's new tariff announcement, which directly drove most of the 5-day CNY move. |

## Similar past events

| Commodity | Date | Event | 5-day % | 20-day % |
| --- | --- | --- | --- | --- |
| SOY | 2018-12-24 | [China imports zero US soybeans in Nov for first time since trade war started](https://feedsoft.ai/events/61444-china-imports-zero-us-soybeans-in-nov-for-first-time-since-trade-war-started.md) | -0.3% | +3.4% |
| SOY | 2018-11-12 | [U.S. soybean farmers hang on for dear life in Trump's China trade war](https://feedsoft.ai/events/62097-u-s-soybean-farmers-hang-on-for-dear-life-in-trump-s-china-trade-war.md) | +1.9% | +4.5% |
| SOY | 2019-05-08 | [Trade war: US-China trade battle in charts](https://feedsoft.ai/events/10431-trade-war-us-china-trade-battle-in-charts.md) | +0.0% | +6.4% |
| SOY | 2019-06-02 | [Crude posts worst May in seven years as trade-war anxiety builds](https://feedsoft.ai/events/11593-crude-posts-worst-may-in-seven-years-as-trade-war-anxiety-builds.md) | -2.4% | +2.5% |
| SOY | 2018-06-29 | [Trade Dispute Hits China’s Yuan, Investors](https://feedsoft.ai/events/8536-trade-dispute-hits-china-s-yuan-investors.md) | +1.5% | +1.1% |
| USDCNY | 2019-08-05 | [Yuan devaluation draws new battle lines in US-China trade war \| Trade War \| Al Jazeera](https://feedsoft.ai/events/5373-yuan-devaluation-draws-new-battle-lines-in-us-china-trade-war-trade-war-al.md) | +1.8% | +3.1% |
| USDCNY | 2018-06-29 | [Trade Dispute Hits China’s Yuan, Investors](https://feedsoft.ai/events/8536-trade-dispute-hits-china-s-yuan-investors.md) | +0.2% | +2.8% |
| USDCNY | 2019-05-13 | [Forex Market: Yuan weakest since December as China adds tariffs](https://feedsoft.ai/events/8441-forex-market-yuan-weakest-since-december-as-china-adds-tariffs.md) | +1.4% | +1.6% |

## Sources

- jp.reuters.com: https://jp.reuters.com/article/markets/analysts-view-4-yuan-drops-through-7dollar-as-sino-us-trade-war-escalates-idUSL4N25112Q/
- reuters.com: https://www.reuters.com/article/china-markets/wrapup-2-china-lets-yuan-slump-past-7-per-dollar-for-first-time-in-over-decade-as-trade-war-escalates-idUSL8N25102Q/

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Data from Feedsoft AI (https://feedsoft.ai/). For information only; not investment advice.