Sign up for our daily briefing

Make your busy days simpler with Axios AM/PM. Catch up on what's new and why it matters in just 5 minutes.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Catch up on coronavirus stories and special reports, curated by Mike Allen everyday

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Denver news in your inbox

Catch up on the most important stories affecting your hometown with Axios Denver

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Des Moines news in your inbox

Catch up on the most important stories affecting your hometown with Axios Des Moines

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Minneapolis-St. Paul news in your inbox

Catch up on the most important stories affecting your hometown with Axios Twin Cities

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Tampa Bay news in your inbox

Catch up on the most important stories affecting your hometown with Axios Tampa Bay

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Charlotte news in your inbox

Catch up on the most important stories affecting your hometown with Axios Charlotte

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!

Illustration: Rebecca Zisser/Axios

The Chinese yuan was allowed to weaken past 7-to-1 against the dollar for the first time ever in offshore markets and the first time in more than 10 years in its onshore market.

What it means: The move is seen as a response to President Trump's threat on Thursday to add 10% tariffs to $300 billion of Chinese imports. Wall Street extended its multi-day sell-off after the news: the Dow is down more than 500 points, while the S&P 500 and the Nasdaq are off as much as 2% early on Monday. Meantime, the yield on the U.S. 10-year note fell to multi-year lows.

Why it matters: The People's Bank of China has aggressively defended the psychologically important 7 level as a matter of policy as the dollar has strengthened over the past 3 years.

  • Trump has long accused China of weakening its currency to make its exports cheaper and gain an unfair advantage in trade, though his administration has on multiple occasions declined to officially declare the country a currency manipulator.
  • Chinese officials had vowed not to weaken the currency as a matter of policy, but the accelerated nature of the move overnight certainly has the look of a coordinated and sanctioned maneuver.

What's happening: The PBOC issued a statement early Monday saying the currency had weakened under the influence of “protectionist measures and expectations of further tariffs against China.”

  • In addition to the weakening yuan, China’s state-run agricultural firms have stopped buying American farm goods, Bloomberg reports, "in a move that looks designed to inflame President Donald Trump. 
  • "China's policy on agricultural goods from the Midwest’s 'great patriots' has been one of Trump’s loudest talking points throughout the trade spat and the news could be painful for those politically sensitive states ahead of the 2020 election," Bloomberg notes.

What they're saying: "Gloves are off," WSJ's China policy reporter Lingling Wei said on Twitter. "China’s central bank doesn’t have the authority alone to let the yuan break 7. The move had to be signed off by the top leadership."

The big picture: Analysts expect Trump to hit back, and many have been speculating since last year that the U.S. could begin weakening the dollar as a matter of policy, igniting a currency war.

Go deeper: The world can't afford a trade war right now

Go deeper

Biden will reverse Trump's attempt to lift COVID related travel restrictions

Photo: Tasos Katopodis via Getty

The incoming Biden administration will reverse President Trump's last-minute order to lift COVID-19 related travel restrictions, Jen Psaki, the incoming White House press secretary, tweeted.

Why it matters: President Trump ordered entry bans lifted for travelers from the U.K., Ireland, Brazil and much of Europe to go into effect Jan. 26, but the Biden administration will "strengthen public health measures around international travel in order to further mitigate the spread of COVID-19," Jen Psaki said. Biden will be inaugurated on Wednesday, Jan. 20 and Trump will no longer be president by the time the order is set to go into effect.

Dominion sends cease and desist letter to My Pillow CEO Mike Lindell

Photo: Stephen Maturen/Getty Images

Dominion Voting Systems on Monday sent a cease and desist letter to My Pillow CEO Mike Lindell over his spread of misinformation related to the 2020 election.

Why it matters: Trump and several of his allies have pushed false conspiracy theories about the company, leading Dominion to take legal action. It's suing pro-Trump lawyer Sidney Powell for defamation and $1.3 billion in damages, and a Dominion employee has sued Trump himself, OANN and Newsmax.

Off the Rails

Episode 5: The secret CIA plan

Photo illustration: Aïda Amer, Sarah Grillo/Axios. Photo: Zach Gibson/Getty Images

Beginning on election night 2020 and continuing through his final days in office, Donald Trump unraveled and dragged America with him, to the point that his followers sacked the U.S. Capitol with two weeks left in his term. This Axios series takes you inside the collapse of a president.

Episode 5: Trump vs. Gina — The president becomes increasingly rash and devises a plan to tamper with the nation's intelligence command.

In his final weeks in office, after losing the election to Joe Biden, President Donald Trump embarked on a vengeful exit strategy that included a hasty and ill-thought-out plan to jam up CIA Director Gina Haspel by firing her top deputy and replacing him with a protege of Republican Congressman Devin Nunes.

You’ve caught up. Now what?

Sign up for Mike Allen’s daily Axios AM and PM newsletters to get smarter, faster on the news that matters.

Please enter a valid email.

Please enter a valid email.

Subscription failed
Thank you for subscribing!