China’s President Xi Jinping and US President Donald Trump throughout a gathering exterior the Nice Corridor of the Folks in Beijing.Artyom Ivanov | TASS | Getty ImagesThe Chinese language yuan may weaken to as little as 7.40 in opposition to the U.S. greenback as tensions between Beijing and Washington present little indicators of abating anytime quickly.That is in accordance with Marc Chandler, chief market strategist and managing companion at Bannockburn World Foreign exchange.”If you happen to had been to inform me what we’re gonna go … towards 7.30, 7.40 on the (yuan in opposition to the greenback), I may see how that might occur as a result of I do not see how these tensions can ease within the subsequent a number of months,” Chandler advised CNBC’s “Squawk Field” on Thursday.As of Thursday morning Singapore time, the onshore Chinese language yuan traded at 7.1675 per greenback, whereas its offshore counterpart modified arms at 7.1855 in opposition to the buck. A day earlier, the offshore yuan touched its weakest stage in opposition to the greenback since Sep. 3, when the greenback traded as excessive as 7.1963 in opposition to the offshore forex. The onshore yuan trades within the mainland and is tightly managed by China, whereas the offshore yuan trades extra freely exterior the mainland, principally in Hong Kong but additionally in Singapore, London and New York.The weakening of the yuan comes as tensions between China and the U.S. ramped up in latest days over plenty of points — from Beijing’s therapy of minority Uighur Muslims within the Xinjiang area to a proposed nationwide safety invoice for Hong Kong that sparked a recent wave of protests. The U.S. has additionally threatened sanctions on China.At current, Chandler stated, the Folks’s Bank of China seems to be “tolerating” the weak point within the Chinese language yuan which “usually occurs because the tensions with the U.S. escalate.””The Chinese language do appear like they’re tolerating or resisting very reasonably the downward stress on the (yuan),” the strategist stated. He warned this might have a “spillover” affect past simply the Chinese language forex and the Hong Kong greenback, but additionally for Beijing’s rivals in East Asia or the broader rising markets.”I believe that is the worry that folks have … that China weakens and that’s … the lead indicator of rising markets as an asset class,” Chandler stated.