THE TRADE war raging between China and the United States shows signs of spilling over into a battle over currency after Beijing’s central bank devalued its yuan against the dollar.
The People’s Bank of China dropped the dollar’s reference rate to 6.7671 yuan – the most radical weakening of the currency in two years.
A cheaper yuan will make Chinese exports less expensive and has the potential to boost sales overseas.
The move came just hours after President Donald Trump threatened to slap tariffs on $500billion worth of Chinese goods.
Mr Trump has previously accused China of manipulating its currency to gain an unfair advantage over American businesses, a message he reiterated via Twitter yesterday.