G7, the summit of the most industrialized nations, had not discussed monetary policy but might do so later Trump said. But trade war was in Trump’s agenda.
Monetary policy is not on the G7 summit’s official agenda. But Trump is at odds with U.S. Federal Reserve Chair Jerome Powell over U.S. interest rates.
The United States and China sought to ease trade war tensions on Monday. Beijing calls for calm and U.S. President Trump predicted a deal after markets fell in response to new tariffs from both countries.
Trump, speaking on the sidelines of the G7 summit of world leaders, said Chinese officials had contacted U.S. trade counterparts overnight. The increasingly bitter trade war between the world’s two largest economies escalated on Friday. Both sides levied more tariffs on each other’s exports. Trump announced an additional duty on some $550 billion of targeted Chinese goods. This came hours after China unveiled retaliatory tariffs on $75 billion worth of U.S. goods. On Sunday, the White House said Trump regretted not raising the tariffs even more. But the president also appeared to back off of his threat to order U.S. companies out of China.
This clearly affected Trump, who then spent the weekend making contradictory comments about his plans for the future of the economic conflict. His mixed messages have sent international markets into a spiral of uncertainty. However, on Monday, Trump eased his agenda and said he had received word that China’s negotiators are ready to return to trade talks.
China’s yuan fell to an 11-year low in the onshore market and a record low offshore on Monday. The latest escalation in the U.S.-China trade war rattled investor’s confidence.
START TRADINGForex – G7 Summit, Monetary policy and trade war
The dollar rebounded and was last up 0.3% against a basket of currencies. Versus the euro it rose 0.2% to $1.1117. Writing before Trump’s comments helped the dollar to rebound.
The Australian dollar, a liquid proxy for global risk sentiment, earlier fell to $0.6690. It fell within a whisker of a recent decade-low of $0.66775, before recovering to $0.6766, up 0.2% on the day.
The New Zealand dollar slipped 0.2% to $0.6380 after earlier sliding to a level not seen since 2015.
Sterling fell 0.3% to $1.2239 as investors waited for the next developments in Britain’s bid to get the EU to renegotiate its Brexit withdrawal agreement.
Gold erased early gains on Monday, slipping from a six-year high touched during the session. Some of the safe-haven demand waned after the United States and China indicated a possible de-escalation of trade war. Silver was up 0.9% at $17.54 per ounce.
In commodities, oil prices rose on Monday after the United States and China both suggested they could ease up in a trade war. The trade war saga has undermined the outlook for the global economy and crude demand.
Brent was up 38 cents, or 0.64%, at $59.72 a barrel by 1200 GMT. US oil was up 54 cents, or 1%, at $54.71 a barrel.