The Chinese central bank says that China doesn't manipulate its currency
- Accusation is related to unilateralism and protectionism
- Accusation severely harms global rules
- Says yuan exchange rate is decided by market supply and demand
- Reiterates that China won't engage in competitive devaluation
- There is no issue of currency manipulation in China
- Will not use the yuan as a tool to deal with trade dispute
China responding to Mnuchin's remarks earlier in a manner you'd expect them to. Sure, they may have fixed the yuan under 7.00 per dollar today and offer some support to the currency via a massive CNH bill issuance.
But there is no doubt that we've entered a new phase in the US-China trade rhetoric and one that will see added volatility in markets as China has given out a clear indication that they aren't afraid to play around with its exchange rate as part of retaliatory measures.
In a game of global politics, financial markets are but a pawn to be used/sacrificed to gain any necessary advantage.
