China’s renminbi will depend on US Fed and election

Significance However, continued economic weakness at home, the possibility of Donald Trump winning the US presidential election and imposing additional tariffs, as well as growing global concerns around China’s trade surplus and possible countermeasures, contribute to downside risk. Impacts Capital outflows would drive a sizeable depreciation that risks further capital outflows and increased imported energy prices. China’s current account surplus and alleged overcapacity have prompted more broad-based trade curbs, adding to renminbi downside risks. A weaker renminbi would exacerbate existing concerns around overcapacity.