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George Ma
in
Forex
May 2 08:30

USD/CNY rate rose sharply after new Trump threatened China

White House plans to prohibit the U.S. government pension fund to buy shares of some Chinese companies, reports Bloomberg.
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US dollar rate against CNY rose by 1%, while U.S. stock futures indices declined by 1.5% over the news from Washington.
Donald Trump may prohibit the U.S. government pension fund from buying shares of Chinese companies that are considered a threat to the national security of the country.
Thrift Savings Plan (TSP) is a pension fund for civil servants as well as employees of the U.S. government security agencies.
The agency notes that TSP should soon invest about US$50 billion in a basket of shares, similar to the MSCI All Country World Index structure, which includes securities of Chinese companies.
Back in 2017, The Board of Directors of TSP made a decision to invest these funds by mid 2020. However, now opponents of the deal are making active efforts to cancel it at the last minute.
TSP ban to purchase shares of certain Chinese companies may take the form of a presidential decree, sources informed Bloomberg. According to another senior official in the White House administration, the decision has not been made yet.
Florida Republican Senator Marco Rubio warmly welcomed the news about possible restriction of TSP's investment opportunities on the Celestial Empire stock market.
The senator, along with his colleagues, introduced a bill designed to force TSP to cancel the above decision.
On Tuesday, Donald Trump said the U.S. could recover at least US$160 billion from China as compensation for the damage that the coronavirus has done to the U.S. economy.