July 22, 2024

Trade negotiations: USA and China back to the table

LQDFX forex blog: Trade negotiations: USA and China back to the table

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Trade negotiations resume following USA’s invitation to China for a new round of talks. China accepted the invitation and, now, officials from both countries fine-tune the details about the meetings.

The previous round of negotiations back in August did not deliver any significant outcome. Last week Trump administration threatened a new round of tariffs on virtually all Chinese imports. China stated that they are ready to respond accordingly with counter-tariffs. What is not clear yet is whether Trump is going to put in force the threatened tariffs.

Yesterday, more than 60 US companies joined forces in a business coalition to fight Trump’s tariffs and his protectionism policy. Moreover, two U.S. business lobbies published a joint survey showing that the negative impact on U.S. companies in China was “clear and far reaching”.

The world’s two largest economies have already imposed tariffs to $50 billion of each other’s goods since July.

Trade concerns are increasing as the threats for tit-for-tat tariffs by Washington and Beijing on each other’s products are growing. Trade uncertainty prevails in the markets.

The news for the new round of trade negotiations renewed traders’ hopes that this spat will end soon.


Forex Market and trade negotiations

The Dollar traded higher 0.2% against its major traded rivals ahead of policy decisions by ECB, BoE and Turkey’s central bank.

The Euro traded mostly flat ahead of ECB’s policy meeting as it is widely expected that there would be no policy modification.

The Sterling remained close to one-month high hit in Wednesday ahead of BoE’s decision about the rates. The pound traded flat against the single currency.

Oil prices dropped from 4-month peak following traders’ concerns, although supply tightens. Brent crude futures were down 70 cents a barrel. U.S. crude futures dropped by 1.15$ from their last close.

Sources: Reuters, CNN money, BBC

PLEASE NOTE The information above is not investment advice.