Markets expect that Washington and Beijing can soon sign off on a deal to end a trade war that has been a drag on global economic growth. Or not?
China and the United States had “constructive talks” on trade in a high-level call on Saturday, state media Xinhua reported on Sunday. But it gave few other details. On Monday, CNBC quoted a Chinese government source saying the mood in Beijing about a trade deal was pessimistic due to President Donald Trump’s reluctance to roll back on tariffs.
However, a report by CNBC, citing a government source, stoked fresh fears over the possibility of a U.S.-China trade deal.
The 16-month trade war between the world’s two biggest economies has slowed global growth. Analysts lowered forecasts for oil demand growth and raising concerns that a supply glut could develop in 2020.
The export-oriented European economy has suffered from the 16-month long trade dispute between the world’s two largest economies.
The tariff war has taken a toll on the world’s manufacturing. Data from the U.S. Federal Reserve on Friday showed the U.S. manufacturing downturn deepened in October. China data came out last Thursday also showed a slowdown.
Attention this week turns to minutes from the Federal Reserve’s latest policy meeting, where the central bank cut interest rates for the third time this year. The minutes are due to be released on Wednesday.
START TRADINGForex – U.S.-China trade deal uncertainty prevails in markets
Major currencies marked time on Monday as markets looked to whether Washington and Beijing can soon sign off on a deal.
The index which tracks the US dollar against six major currencies was flat at 97.95 after easing to an earlier low of 97.82.
The Australian dollar traded down 0.2% at $0.6809, while the kiwi was marginally higher at $0.6400.
Against the safe-haven yen, the dollar was stronger by 0.3% at 109.05.
The euro bounced back from a one-month low of $1.0989 set on Thursday. The euro enjoyed a small respite on Monday, jumping to an 11-day high versus the U.S. dollar. The euro was up 0.1% at $1.1060, having earlier reached $1.1068, its highest since Nov. 7.
The liveliest mover was the pound, up 0.5% against the dollar to $1.2966 and rising against the euro to 85.30 pence. It has surged to a four-week high of $1.2985 versus the dollar and a six-month high of 85.22 pence versus the euro. Sterling was boosted by expectations that the Conservative Party could win a majority in the Dec. 12 election.
Gold prices edged down on Monday as optimism grew about U.S.-China trade ties following a report of “constructive talks” over the weekend. Losses were capped by a softer dollar. Spot gold was down about 0.3% to $1,463.40 per ounce.
Oil prices edged lower on Monday, giving up some of last week’s gains, amid uncertainty over a US-China trade deal. Brent crude futures fell 1% or by 62 cents to trade at $62.68 per barrel at 1345 GMT. West Texas Intermediate (WTI) crude was at $57.31 a barrel, down 41 cents.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money