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By Saikat Chatterjee
LONDON, May 15 (Reuters) - Average daily turnover in the overseas-traded yuan hit a record last week, according to data from multi-dealer currency platform EBS, as trade tensions between China and the United States escalated,
Average daily turnover in spot transactions rose by 118% from April, data provided to Reuters showed on Wednesday. EBS did not provide data on volume.
“Turnover remains strong as trade tensions remain high,” said Jeff Ward, global head of NDFs and Forwards and head of FX Asia for EBS.
U.S. President Donald Trump threatened higher tariffs on billions of dollars of Chinese imports last week, and Beijing responded with planned tariff hikes of its own on Monday.
Investors have executed their views on what impact higher tariffs would have on the world’s top two economies primarily through the foreign exchange markets.
The spike in tensions has also sent the yuan down nearly 3 percent to a 2019 low of 6.90 against the dollar in less than two weeks.
That weakness has reverberated through currency markets, yanking down the Australian dollar and weighing on the euro.
While increased turnover in the yuan has usually spurred greater activity in other emerging market currencies, the latest escalation in the trade war between Beijing and Washington has triggered greater trading in major currencies.
“CNH is among our top 3 most traded currencies on our platforms,” Ward said, referring to the offshore yuan.
Asia accounted for nearly half of total turnover followed by London and New York, according to EBS.
Reporting by Saikat Chatterjee; editing by Sujata Rao and John Stonestreet