U.S.-China trade war may become a currency war within two years, strategist says.
China's President Xi Jinping and U.S. President Donald Trump attend a welcome ceremony at the Great Hall of the People in Beijing on November 9, 2017.The U.S. could spark a currency war in "two to three years" once it shifts away from its trade war with China, a strategist claimed Friday.
Speaking on CNBC's "Squawk Box Europe," Christian Gattiker, head of research at Julius Baer, said the U.S. Federal Reserve has been yielding to pressure from the White House with its policy — a pattern that could shape the dollar's future. "They moved 180 degrees from being in auto-pilot tightening mode to cutting rates and easing monetary policy, so I think there is a certain pressure on," he said.
Gattiker added that the current geopolitical environment was creating new objectives for the U.S. central bank, including the maintenance of an "orderly economic environment." "With its new mandate, is entitled to yield to this pressure, even in the greater scheme of things with the trade war. So I think a weaker dollar is warranted from a U.S. perspective," he said. "We might actually be turning from a trade war situation to a currency war situation in the next two to three years."
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