In an interview with the Financial Times earlier today, the U.S. Treasury Secretary Steven Mnuchin warned China against devaluing its currency and added that a trade agreement needed to include terms on exchange rates.
“As we look at trade issues there is no question that we want to make sure China is not doing competitive devaluations. The renminbi has depreciated significantly during the year. … We are going to absolutely want to make sure that as part of any trade understanding we come to that currency has to be part of that,” Mnuchin said, as reported by CNBC.
The trade-sensitive S&P 500 Materials and Industrials sectors reacted negatively and were last seen losing 1.3% and 1.75%, respectively. Meanwhile, the CBOE Volatility Index, Wall Street’s fear gauge, is also up more than 10% on the day to reflect the flight-to-safety.
As of writing, the S&P 500, the Dow Jones Industrial Average, and the Nasdaq Composite were down 0.85%, 0.9%, and 1.5%, respectively.