Starmer's China Visit: Balancing Trade and Security

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Global FX Dynamics Reinforce Dollar Downtrend

Source: Reuters

The Vaccine Alliance (GAVI) logo and U.S. flag are seen in this illustration taken April 23, 2025. REUTERS/Dado Ruvic/Illustration/File Photo

The Trump administration has told global vaccine group Gavi to phase out shots containing the preservative thimerosal as a condition of providing the group with funding, a U.S. official and a Gavi spokesperson told Reuters.

The request, which Reuters is the first to report, is the latest sign of efforts by the administration of President Donald Trump to influence health policy globally.

Anti-vaccine groups, including one founded by U.S. Health Secretary Robert F. Kennedy Jr., have for decades claimed that thimerosal, a mercury-based preservative used in vaccines, is linked to autism and other neurodevelopmental disorders, despite many studies showing no related safety issues.

In June last year, Kennedy cut $300 million in annual funding for Gavi, which helps the world's poorest and lower-income countries buy vaccines to prevent diseases such as measles and diphtheria.

Kennedy, who has long promoted anti-vaccine views contrary to scientific evidence, says the group ignores safety issues with the immunizations it provides. Gavi says vaccine safety is its utmost concern.

"Until a plan for removal of thimerosal-containing vaccines is developed and the plan initiated, the United States will withhold future new funding," an official for the U.S. Department of Health and Human Services told Reuters.

The official would not comment on when the request was made, but claimed Gavi has so far refused to develop such a plan. A Gavi spokesperson confirmed the request to remove thimerosal from its portfolio, and said the group remained in contact with the U.S. government on the subject.

"While we very much hope to find a pathway to welcoming the U.S. back as a donor, any decision related to Gavi's portfolio would require a decision by Gavi's board and input from preceding governance committees, which will be guided by scientific consensus," the spokesperson said.

OFTEN USED IN LOW- AND MIDDLE-INCOME COUNTRIES

Thimerosal is mainly used to ensure vaccines in multi-dose vials remain stable. That helps immunization campaigns in low- and middle-income countries because multi-dose vials are cheaper and simpler to distribute, Gavi and the World Health Organization say.

The preservative has largely been phased out in high-income countries, where vaccines usually come in a single-use format, although its use is not prohibited. Under Kennedy, the U.S. moved last summer to stop use of influenza vaccines containing thimerosal, representing around 5% of flu shots given in the country, despite U.S. health agencies having declared them safe.

The U.S. official said the request of Gavi aims to bring its policies in low- and middle-income countries in line with the U.S., Canada, and most European nations.

The safety of thimerosal has been studied for decades, after concerns were raised in the 1990s about exposure to mercury in vaccines, according to the WHO.

No compelling scientific evidence has been found to suggest that there is a risk, particularly when compared to the dangers of keeping children unprotected against deadly diseases, the WHO says.

The U.S. request applies both to the remaining $300 million that the Biden administration had pledged to Gavi with Congressional approval, but which is still outstanding, and to any future funding, the official said.

The U.S. previously contributed around 13% of Gavi's funding, and the organization has embarked on a series of cost-cutting measures to try to address the shortfall, which has been exacerbated by cuts from other high-income nations.

The Trump administration has cut billions of dollars in health funding internationally and withdrawn from the WHO.

The U.S. government has said it is still committed to global health and is pursuing bilateral agreements with countries under Trump's 'America First' agenda.

Last week, the U.S. health department said a hepatitis B vaccine study in Guinea Bissau would help inform global policy.

The study, funded by the U.S. Centers for Disease Control and Prevention, is now undergoing further ethical review after international criticism.

The U.S. CDC last month withdrew its longstanding recommendation that all newborns should get the hepatitis B vaccine, drawing a swift rebuke from vaccine experts.

Source: Reuters

Gold Trading Linked To Baht Appreciation

New Transaction Caps Aimed At Reducing Volatility

Growth Outlook Remains Below Potential

Broader Challenges Facing The Economy

Source: Reuters

Behind the headlines of the U.S.-China trade war, a quieter battle over currency management is sending shockwaves through global finance—with a direct impact on Bitcoin.

While President Trump's aggressive tariff policy dominates discussions, China's strategic response is subtly reshaping international cash flows and creating volatility for crypto investors.

The Hidden Engine: Yuan Policy and Dollar Liquidity

Since 2023, the Trump administration has imposed heavy tariffs on nearly all goods imported from China. As of January 2026, the average U.S. tariff on Chinese products stands at approximately 29.3%.

In response, Beijing has leaned on a crucial tool: tight control over the yuan's exchange rate. According to a recent analysis by JPMorgan, this strategy has been pivotal to China's economic resilience. It not only helps preserve the competitiveness of Chinese exports and combat deflation but also has a powerful side effect: it amplifies dollar-led liquidity cycles during periods of trade stress.

Simply put, when trade tensions escalate, China's currency management acts like a multiplier, intensifying the squeeze on global dollar liquidity.

Why This Matters for Your Bitcoin Portfolio

As a macro-sensitive asset, Bitcoin's price is highly responsive to these global liquidity shifts.

The pattern is clear:

• When tariffs escalate, risk-off sentiment spreads and dollar liquidity becomes scarce, causing Bitcoin's price to fall.

• When tensions ease, liquidity returns to the market, and Bitcoin tends to rebound.

This dynamic was on full display in March and April of last year, when Bitcoin’s performance directly mirrored the ebb and flow of trade hostilities. This reveals a fundamental difference in how each country influences crypto. The U.S. impact is often direct, flowing from capital movements in vehicles like ETFs. China's influence, however, is indirect but equally powerful, operating through its management of the yuan and its effect on global financial plumbing.

Beyond the Headlines: The Real Levers of Power

This interpretation aligns with arguments from market commentator Arthur Hayes, who has long suggested that U.S.-China trade deals are often more performative than substantive. He emphasizes that the real economic adjustments happen through less visible channels.

In his view, while tariffs and negotiations create the political narrative, the actual market outcomes are dictated by FX policy, capital controls, and liquidity management. JPMorgan's outlook reinforces this logic, suggesting that even if China prevents the yuan from strengthening significantly, the interplay between tariffs and currency management will continue to define the macro environment where Bitcoin trades.

China's Export Machine Defies US Tariffs

Despite the pressure from U.S. tariffs, China's export engine has proven remarkably durable. According to JPMorgan Private Bank's latest Asia outlook, China’s real exports are on track to grow by about 8% in 2025, with its global market share expanding to roughly 15%. This has occurred even as its U.S.-bound exports have fallen to less than 10% of its total.

Figure 1: China has successfully diversified its export destinations, with a notable decline in shipments to the U.S. offset by surging trade with ASEAN and the Rest of the World (RoW) through early 2025.

This resilience is fueled by two key factors: a successful diversification of trade toward ASEAN and other regions, and the deliberate policy of tightly managing the yuan instead of allowing it to appreciate.

A Closer Look at the Yuan's Trajectory

While the Chinese yuan has strengthened about 4% from its 2023 lows, its performance against the dollar in 2025 has been marginal. This highlights just how tightly managed and range-bound the currency remains.

JPMorgan analysts argue that any recent yuan strength is likely seasonal. The medium-term outlook points to a stable trajectory, as Chinese policymakers prioritize export competitiveness to combat persistent deflationary pressures. The bank cautioned that the bar for any meaningful appreciation of the yuan is high, describing its movements as largely dictated by the dollar within a low-volatility framework.

The Bottom Line for Crypto Traders

For crypto markets, the key takeaway is that a sustained rally in the yuan is not the primary factor to watch. Instead, the focus should be on liquidity transmission.

China’s currency framework is a mechanism for transmitting trade-related shocks through the global dollar system. It is this dynamic—not the direct strength of the yuan—that shapes the macro currents steering Bitcoin and other digital assets.

South Korea's former first lady Kim Keon Hee, wife of impeached former president Yoon Suk Yeol, arrives at a court to attend a hearing to review her arrest warrant requested by special prosecutors at the Seoul Central District Court, in Seoul, South Korea August 12, 2025. JUNG YEON-JE/Pool via REUTERS/File Photo

A South Korean court on Wednesday sentenced former First Lady Kim Keon Hee to one year and eight months in jail after finding her guilty of accepting bribes from Unification Church officials in return for political favours.

The court cleared Kim, who is the wife of ex-President Yoon Suk Yeol who was ousted from office last year, on charges of stock price manipulation and violating the political funds act.

The ruling, which can be appealed by the former first lady or prosecutors, comes amid a series of trials following investigations into Yoon's brief imposition of martial law in 2024 and related scandals involving the once-powerful couple.

Prosecutors had demanded 15 years in jail and fines of 2.9 billion won ($2 million) over accusations that include accepting luxury Chanel bags and a diamond necklace from South Korea's Unification Church in return for political favours.

The court found there was not sufficient evidence to conclude Kim was guilty of manipulating stock prices and violating political funding laws, by receiving opinion polls from a power broker in return for influencing the choice of poll candidates.

Kim had denied all the charges. Her lawyer said the team would review the ruling and decide whether to appeal the bribery conviction.

Kim walked into the courtroom at the Seoul Central District Court clad in a dark suit and wearing a face mask, and sat quietly as the lead judge of a three-justice bench delivered the verdict.

The Unification Church said the gifts were delivered to her without expecting anything. Its leader Han Hak-ja, who is also on trial, has denied that she directed it to bribe Kim.

Yoon, who was ousted from power last April, also faces eight trials on charges including insurrection, after his failed bid to impose martial law in December 2024.

He has appealed against a five-year jail term handed to him this month for obstructing attempts to arrest him after his martial law decree.

($1=1,431.8000 won)

Source: Reuters

Key Points:

Bitcoin (BTC) traders are watching the US dollar hover at a level that previously aligned with two of its biggest cycle rallies.

Bitcoin Could Hit $150K If This Dollar Fractal Plays Out

The US Dollar Index (DXY) trades near 96.3, extending a broader downtrend that has accelerated during bouts of macro stress. Traders have linked the softness to shifting global flows as markets reassess tariff risks, growth expectations, and cross-asset positioning tied to Japan.

US dollar index two-week chart. Source: TradingView

A stronger yen and periodic "yen carry trade unwind" dynamics can tighten global risk conditions and force position cleanups across FX and equities, moves that often spill into the dollar market.

Against that backdrop, DXY now sits within striking distance of 96, a level that acted as a major inflection point in prior cycles.

When DXY last broke below 96, Bitcoin surged from roughly $2,000 to $20,000 within six months in 2017. In 2020, a similar dollar breakdown preceded BTC's run from about $10,000 to $64,000 over nine months, an upside move of about 540%.

DXY monthly performance chart. Source: TradingView/Matthew Hyland

In 2020, near-zero interest rates, massive quantitative easing, and huge fiscal stimulus pushed real yields down and revived the "fiat debasement" trade, lifting BTC alongside broader risk assets.

In comparison, the current macro backdrop is tighter. Rates and real yields are higher, and yen carry unwind/tariff shocks can turn markets risk-off.

Still, ETFs and institutional demand for BTC may offset some of that if the Federal Reserve policy expectations pivot toward easing. That could trigger capital flows toward the Bitcoin market, raising its odds of hitting $150,000 in 2026, as our special annual outlook on BTC suggested.

Bitcoin's Gold Signal Adds a Second Bullish Read

Traders are also tracking Bitcoin's performance against gold, a ratio some view as a cleaner long-term cycle gauge than BTC/USD.

When priced in gold, the BTC/XAU ratio has historically gravitated back to its 200-2W moving average about once every four years.

The pair is drifting toward that benchmark again, reviving comparisons to prior "reset" phases in which Bitcoin's underperformance versus gold slowed before BTC entered a new expansion leg.

BTC/XAU ratio vs. BTC/USD two-week performance. Source: TradingView

In my view, market participants typically treat a test of the 200-2W average as a confirmation-heavy zone rather than an immediate buy signal, since the ratio can remain depressed for extended periods.

Still, the repeated timing of the revisits has kept the level on traders' radar as a potential macro pivot.

Source: FX Empire