As we know, the Dollar has spiked higher in reaction to the Trump election victory, but more specifically, it has been allowed by the Chinese Government, to spike higher against the YUAN.
Put another way, the China YUAN has depreciated vs. the Dollar to levels last seen in Q4, 2010! (See chart below).
What is particularly interesting is the fact that President-Elect Trump bashed China as a currency manipulator constantly throughout his campaign, and accused China of devaluing its currency to take US jobs and business.
Well, the Chinese authorities have not made much of an attempt to halt the post-election decline in the YUAN, as if to say to Trump that his ascendancy has triggered a natural reaction in the currency markets, a far different situation than orchestrated currency management.
It just so happens that a cheaper YUAN is very beneficial to the Chinese economy, which also happens to be the second largest on the planet, and is vital to global growth prospects that Trump so very much is seeking.
How the new Trump Administration handles this paradoxical situation will tell us volumes about the forthcoming relationship.
Meanwhile, the Chinese government continues to test the tolerance of the forthcoming Trump-China policy.