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Business Insight

Trade war could delay yuan challenge to dollar's global role

Beijing's disenchantment with U.S. currency's unique status is growing

The Chinese yuan has weakened rapidly in recent weeks, beset by U.S. President Donald Trump's threatened trade war. The currency hit a low of 6.69 to the dollar on July 3, from a recent high of 6.27 on April 14, and was trading at 6.61 on July 9, despite statements from central bank officials supporting a stable price.

The yuan's weakness has been compounded by concerns about a slowdown in China's economic growth and possible interest and reserve rate cuts. But the currency's vulnerability to external threats raises an issue of even greater long-term international importance -- its prospects of challenging the dollar as the world's principal reserve currency.

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