“China’s currency weakened, with the offshore yuan nearing its weakest level ever versus the dollar.” Bloomberg Trade Newsletter, May 27, 2020
On April 20, 2020, I wrote an article entitled “Oil is Less Than $0 Per Barrel, Expect the Cost of Toys to Drop.” As I wrote at the time: “Most toys are made from petroleum-based plastic. That means that the cost of toys is connected in large part to a barrel of oil.”
Now we see another indicator that prices could be going down for toys. According to a May 27, 2020, Bloomberg Trade Newsletter, “China’s currency weakened, with the offshore yuan nearing its weakest level ever versus the dollar, amid increasing diplomatic and trade tensions with the U.S.”
“As Its Economy Slows, China Embraces a Weaker Currency,” Wall Street Journal
Simply put, the weaker the value of the Yuan, the more a U.S. dollar will buy. That is good for Chinese exports. It is also good for U.S. toy companies who, with a higher valued U.S. dollar, will see the actual cost of goods going down.
Things just got even more complicated yesterday when the U.S. government announced that it was considering ending its special relationship with Hong Kong. Such a move could make prices go up, down, or just confuse things. These are certainly far from boring times for the toy industry.