BEIJING/WASHINGTON - China has hit back against the Trump administration with a drastic exchange rate devaluation, almost guaranteeing a superpower
showdown and a lurch towards full trade war.

The yuan blew through the symbolic line of seven to the dollar for the first time since the global financial crisis, with the offshore rate in Hong Kong spiking to 7.07 in
moves that stunned seasoned traders.

The calculated action by the People’s Bank (PBOC) threatens to unleash a wave of deflation across the world and risks pushing East Asia and much of Europe into
recession. Analysts say the Chinese move is certain to provoke a ferocious response from the White House. (FA)