Trade talks will resume despite Trump tariffs threat. FX markets were also broadly quiet and the U.S. dollar was flat.
Chinese Vice Premier Liu He will visit the United States this week for trade talks, Beijing said, despite Trump threats. U.S. officials have said China has backtracked on substantial commitments made during months of negotiations seeking to end their trade war.
The US president tweeted on Sunday that he would target a further $325 billion of Chinese goods with 25% tariffs “shortly”. Essentially, he covered all products imported to the United States from China. On Friday, Trump had cited progress in trade talks and praised his relationship with Chinese President Xi Jinping. However, Trump’s move marked an escalation in tensions between the world’s largest economies.
Trump’s tweets abruptly ended a five-month ceasefire in a trade dispute that has cost the two countries billions of dollars. A swift deterioration in China-U.S. trade talks hit global financial markets this week.
Broader currency markets were largely stable. Foreign exchange traders have not panicked about the prospect of a breakdown in negotiations between China and the United States. The moves on Tuesday were small following a bout of nerves at the start of the week.
START TRADINGForex – China vice premier will visit U.S. for trade talks
The recovery in investor sentiment on Tuesday was fragile, with gains in stock markets small.
The U.S. dollar was flat. The index – which measures the greenback against a basket of currencies – stood at 97.528. The euro hovered around $1.12.
The Australian dollar surged as much as 0.8% to $0.7048 after the country’s central bank held interest rates at a record low. This dashed speculation that it might ease policy following a weaker-than-expected reading of inflation.
The safe-haven yen up 0.1% to 110.61. The Japanese currency had briefly touched five-week highs of 110.285 on Monday.
Sterling slipped 0.1% to $1.3084 as investors remained cautious about talks between the Conservative and Labour parties to agree a Brexit deal. Traders refrained from taking positions on the British currency. The British currency jumped to a one-month high on Friday on hopes the talks might lead to a Brexit deal.
Against the dollar, the pound traded flat at $1.3090 and was steady against the euro at 85.48 pence.
START TRADINGMetals and Commodities
In commodities, oil prices fell by 1% on Tuesday as renewed doubts over U.S.-China trade talks stoked concerns over global growth. However, U.S. sanctions on Iran and Venezuela tightened supply and helped to stem losses.
U.S. West Texas Intermediate (WTI) crude futures fell by 57 cents, or 0.9%, to $61.68. Brent crude futures were down 81 cents or 1.1%.
Gold prices climbed on Tuesday after U.S. President Donald Trump escalated Sino-U.S. trade tensions, which prompted investors to move away from riskier assets. Spot gold was up 0.1% at $ 1,281.04 per ounce, as of 1120 GMT. U.S. gold futures fell 0.1% to $1,282.10.
Silver slipped 0.4% to $14.84 per ounce, while platinum was little changed at $872.44.
PLEASE NOTE The information above is not investment advice. LQDFX
Sources: Reuters, Investing, CNN money