Senior U.S. and Chinese officials renewed their commitment and had their Phase 1 trade deal reaffirmed in a telephone call originally expected on Aug. 15.
This marked the first formal dialogue between the two economic giants since early May. There was a long-lasting concern amid traders that the deal could be on shaky ground because of worsening U.S.-China ties.
The US President Trump has frequently expressed anger at China over the novel coronavirus pandemic. President Donald Trump said last week he had postponed talks with China because “I don’t want to deal with them now.”
Washington and Beijing have traded sanctions and barbs over a growing list of issues. The list includes a new national security law imposed on Hong Kong, the coronavirus and U.S. accusations of national security threats posed by Chinese tech firms.
Chinese purchases of U.S. goods are running well behind the pace needed to meet the first-year target. China has recently ramped up buying of farm goods including soybeans. But it is far from meeting its commitment to buy $36.5 billion worth of U.S. agricultural goods under the deal purchases.
Trump has counted on such purchases to bolster his support in farm states that backed him in the 2016 election.
The U.S. dollar fell, and the Australian dollar rose after the two countries both hailed the phone call as a success. That reaffirmed investors’ faith that even as diplomatic ties between the two countries fray, the trade relationship can endure.
Investors also await Federal Reserve Chairman Jerome Powell’s address on Thursday for hints on the central bank’s next steps to support an economic recovery.
START TRADINGForex – Trade deal reaffirmed by phone call
News of the phone call helped added to market optimism from signs of progress in developing COVID-19 treatments and vaccines. Investors were also looking ahead to U.S. consumer confidence figures for clues as to the relative performance of and U.S. economy.
The greenback inched lower versus the euro, by 0.2% to $1.1813, and by 0.2% against the British pound to $1.3088.
The U.S. dollar was only up versus the Japanese yen, last trading at 106.17 yen, 0.2% stronger.
Against a basket of currencies, the US dollar dipped 0.2% to 93.03. It has steadied this month after a roughly 10% slide from late March through to early August.
The news about that the two countries had their trade deal reaffirmed lifted the Australian dollar 0.2% to $0.7171.
The euro rose nearly 0.5% on Tuesday on better-than-expected German economic data. German business morale improved more than expected in August as both manufacturing and services picked up steam. The euro was last up 0.4% at $1.1831, having risen as high as $1.1842 earlier.
The British pound rose on Tuesday as the dollar slipped and investors shrugged off an unexpected drop in Britain’s monthly retail sales data.
Sterling was last up 0.4% at $1.3122 versus the greenback. It was little changed at 90.195 pence versus the euro.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money