The US-China trade dispute is on the verge of turning into a currency war after President Donald Trump tweeted on Friday that China and the EU were “manipulating their currencies” to gain a price advantage in trade, shining a political spotlight on the renminbi, which has weakened 5 per cent since June. 

Mr Trump’s missive was followed hours later by comments from US Treasury secretary Steven Mnuchin, who told Reuters on Friday that “there's no question that the weakening of the currency creates an unfair advantage” for China. Mr Mnuchin stopped short of accusing Beijing of manipulation but said he would “carefully assess” the question. 

The comments came after the renminbi hit a  year low against the dollar on Friday, with the Chinese currency briefly weakening beyond 6.8 per dollar.