Signals from China that a “phase one” trade deal was close to being finalized lifted investors’ sentiment.
China said that it had agreed with the United States to remove tariffs imposed during their months-long trade war in phases. The statement came from the Chinese commerce ministry said on Thursday, without specifying a timetable.
An interim U.S.-China trade deal is widely expected to include a U.S. pledge to scrap tariffs scheduled for Dec. 15. Tariff cancellation was an important condition for any agreement, ministry spokesman Gao Feng said. He added that both must simultaneously cancel some tariffs on each other’s goods to reach a “phase one” trade deal. The proportion of tariffs cancelled for both sides to reach a “phase one” deal must be the same, but the number to be cancelled can be negotiated, he added, without elaborating.
A deal may be signed this month by U.S. President Donald Trump and Chinese President Xi Jinping at a yet-to-be determined location. One possible location was London, where the leaders could meet after a NATO summit that Trump is due to attend.
The state-owned Xinhua News Agency said Beijing was also considering removing restrictions on US poultry imports. China has banned all U.S. poultry and eggs since January 2015 due to an avian influenza outbreak.
START TRADINGForex – China signals progress in trade talks
The tit-for-tat tariff war between the world’s two biggest economies helped safe-haven bullion rise nearly 16% this year.
Against a basket of currencies, the dollar traded broadly flat, slightly down at -0.1%.
The U.S. dollar gained versus the yen on Thursday after China signals a possible trade deal which prompted investors to dump perceived safe-havens. The dollar jumped up to near three-month highs versus the yen, retracing its 0.3% losses from earlier in the session.
The Australian and New Zealand dollars – proxies for risk which had been weakening due to uncertainty surrounding the possible trade deal – also gained. The Aussie was up 0.2% versus the dollar.
The euro was up 0.1% against the dollar, having hit three-week lows after positive U.S. data.
Sterling fell to a two-week low after two Bank of England officials unexpectedly voted to cut interest rates this month. Others said they would consider a cut if global and Brexit headwinds did not lift. The British currency fell to a lowest point in nearly two weeks at $1.2805 and was last down 0.25% on the day. It was almost 0.4% weaker against the euro at 86.42 pence.
Gold eased on Thursday, losing some of its safe-haven appeal as China signals progress in U.S.-China trade negotiations rekindled a stock markets rally. Spot gold was down 0.4% at $1,485.02 per ounce at 1208 GMT, while U.S. gold futures fell 0.5% to $1,485.90. Among other precious metals, silver dipped 0.5% to $17.54 per ounce.
PLEASE NOTE The information above is not investment advice.Sources: Reuters, Investing, CNN money