China’s yuan slipped again on Friday and was expected to extend its steady decline, providing Beijing with a buffer against punitive US trade tariffs and defying President Donald Trump’s warning over the dollar’s rise.

The yuan is kept in a narrow range each day by Beijing which, while allowing market forces some degree of play, is known to intervene — in the past attracting US allegations of currency “manipulation”.

After sliding recently to its lowest levels in a year as the Sino-US trade conflict heated up, the yuan fell on Friday past 6.80 to the dollar before recovering to around 6.78 later in the day, according to Bloomberg data.

The late rebound triggered market speculation that authorities had intervened to prevent the yuan falling too steeply, but analysts said China seems ok with further depreciation as the trade war rumbles on.

“The (yuan’s) slide against the US dollar will substantially cushion the impact on Chinese exporters from the planned next round of US tariffs,” Rajiv Biswas, chief Asia economist with IHS Markit, told AFP.

The world’s two largest economies face a potential full-blown trade war after the United States earlier this month imposed 25 percent tariffs on $34 billion of Chinese products, drawing a tit-for-tat response from Beijing.

Washington has since threatened tariffs on another $200 billion in Chinese exports, prompting Beijing to vow further retaliation.

In excerpts of an interview with US television network CNBC aired Thursday, Trump said a strong dollar “puts us at a disadvantage”, adding that the Chinese yuan “has been dropping like a rock”.

Those comments, plus Trump’s criticism of Federal Reserve interest rate hikes, caused the dollar to fall back in the US on Thursday.

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