The Chinese yuan has come under significant "bearish" pressure due to the potential return of Donald Trump to the White House. Over the past three weeks, the yuan has lost about 1.5% of its value, marking its largest decline in a year. The pressure comes not only from speculators betting against the yuan but also from Chinese exporters who have started stockpiling dollars.

The yuan began to weaken in 2023 due to China’s sluggish economy and low interest rates. Adding to this, the prospect of a Trump victory in the November election and his promise to impose higher tariffs on Chinese goods is increasing tension in the currency market. Experts believe that the yuan may continue to fall, being used as a tool to cushion the effects of a trade war, as it was during Trump's first term. In 2018, the People's Bank of China weakened the currency by 5% to support exports, and it fell by another 1.5% a year later.

As part of his campaign, Trump has pledged to impose 60% tariffs on Chinese goods, which could exert even more pressure on the yuan. If such measures are taken, analysts at XPBEE suggest that this could significantly slow China’s economic growth, and the yuan could "shrink" by 10-12%.

Another factor weakening the yuan is the low yield on Chinese government bonds, which stands at just 2%, half the yield of US Treasury bonds. This is prompting investors to keep their assets abroad. They are either hesitant to repatriate their capital or are seeking to hold foreign currency deposits in dollars, with dollar reserves in Chinese banks nearing $850 billion.