Investors are being warned by Bank of America Corp. that they are not fully considering the risks associated with a trade war under a Donald Trump presidency.
It is predicted that emerging-market currencies could decline by 5% in the first half of 2025. The bank's strategists, led by David Hauner, anticipate a significant selloff in sovereign debt as tensions escalate.
The Chinese yuan is expected to be particularly affected, with projections suggesting it could fall to 7.6 per dollar if the incoming U.S. administration enacts 40% tariffs on Chinese goods. If tariffs increase to 60%, the yuan could plummet to 8 per dollar, compared to its current value of approximately 7.24.