China remained open to signing a partial trade deal with the United States despite being put on the tech blacklist. Currencies linked with greater investor risk appetite jumped.
The U.S. government has widened its trade blacklist to include some of China’s top artificial intelligence start-ups. This move was made to punish Beijing for its treatment of mostly Muslim minorities. The US is hitting back against Chinese entities allegedly involved in facilitating human rights abuses in camps in China’s Xinjiang region.
The blacklist targets 20 Chinese public security bureaus and eight companies. The action bars the firms from buying components from U.S. companies without U.S. government approval. U.S. officials said the action was not tied to this week’s resumption of trade talks with China. But it signals no let-up in Donald Trump’s hard-line stance as the world’s two biggest economies seek to end their 15-month trade war.
China said the United States should stop interfering in its affairs. It will continue to take firm and resolute measures to protect its sovereign security according to a Chinese official.
In August, the Trump administration also released an interim rule banning federal purchases of telecommunications equipment from five Chinese companies, including Huawei. Huawei has repeatedly denied it is controlled by the Chinese government, military or intelligence services. The Chinese tech company has filed a lawsuit against the U.S. government’s restrictions.
Deputy-level meetings between U.S. and Chinese trade negotiators began in Washington on Monday, with little immediate signs of progress.
START TRADINGForex – Partial trade deal is an option for China
Markets also took into account remarks by Federal Reserve Chairman that he was open to further interest rate cuts and bond purchases.
The dollar fell on Wednesday. The index that tracks the dollar against a basket of six other currencies was down 0.1% at 99.007.
The Australian, a global risk barometer, was last up 0.3% at $0.6744 and the New Zealand dollar rose 0.4% to $0.6319.
The euro was up 0.3% at $1.09785 as the dollar weakened. The euro was a sell against the dollar, though, since it was likely to maintain its status as a safe-haven currency.
The pound was slightly higher, though not far from the one-month low it reached the day before. Sterling was up 0.2% at $1.2237 and flat against the euro at 89.78 pence.
Oil prices extended declines as U.S. visa restrictions on Chinese officials. Also, the addition of more Chinese companies to a U.S. trade blacklist weighed on already slim hopes that Washington and Beijing could reach a truce at trade negotiations this week.
Gold prices on Wednesday held on to the previous session’s gains. Spot gold rose 0.4% to $1,510.50 per ounce as of 0723 GMT. Fading hopes for progress in U.S.-China trade talks hit risk appetite
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money