Currencies

Worry grows about China's falling currency and rising dollar debt

Data: Institute of International Finance; Chart: Axios Visuals

The Chinese government had put plans in place to reduce the high levels of debt in the country's economy this year, but the negative economic effects of the trade war have put those plans on the back burner and companies are again levering up, in large part with dollar-denominated debt.

Why it matters: As the yuan weakens, debts held in dollars get more expensive. That could pose a major problem for China should the economy continue to slow. It would also mean problems for the rest of the world, as China is the planet's No. 1 trading nation.

Jerome Powell's rate cut could send the dollar "significantly higher"

Data: Investing.com; Chart: Axios Visuals

The dollar rose to its highest level in more than 2 years after the Federal Reserve's rate cut Wednesday, as currency markets got a reality check about the growth prospects of the greenback against the world's other currencies.

What's happening: Strategists have been expecting the dollar to weaken for the past 2 years, yet it has remained strong against global peers like the euro, pound and yuan. After Jerome Powell's Wednesday press conference, the dollar looks poised to rise to new highs.