Trump’s tariff battle with China is spurring record dollar-yuan trading

Market uncertainty tied to the ongoing U.S.-China trade war has spurred more transactions than ever before between the American dollar the Chinese yuan in recent months.

Much of that volume comes as businesses and investors with exposure to the Chinese market are looking to hedge their foreign exchange risk. Many of them are looking to buy into the strengthening dollar, and that’s stoked speculation that Chinese authorities are intervening in the market to defend their currency, boosting trading volumes to new highs in the process.

On Tuesday, currency traders told Reuters major state-owned banks were selling dollars to defend the Chinese yuan, as the greenback climbed to a 16-month peak against a basket for currencies.