US-China agreement was reached earlier in the weekend during the G20 summit. Trump and Chinese President Xi Jinping agreed to revive trade talks.
The compromise reached between Trump and Xi at the week’s G20 meeting went further than most had expected.
U.S. President Trump and President Xi Jinping of China managed to get trade talks back on track this past weekend. U.S. President Donald Trump offered concessions including no new tariffs and an easing of restrictions on tech company Huawei. China agreed to make unspecified new purchases of U.S. farm products and return to the negotiating table. However, no deadline was set for progress on a deal. Besides, the world’s two largest economies remain at odds over significant parts of an agreement.
Uncertainty about whether a meaningful agreement can be finalized could loom over markets in the second half of the year.
After the United States and China agreed to restart their trade talks the investor risk appetite was improved. The markets reacted favourably this morning to the restart of trade talks.
The dollar and offshore Chinese yuan rallied on Monday after the United States and China agreed to restart their troubled trade talks. Further, the Japanese yen and Swiss franc were the big casualties as investors sold safe-haven currencies.
START TRADINGForex – US-China agreement to revive trade talks
Investors dumped safe-haven assets. This week sees the release of crucial U.S. economic data including non-farm payrolls on Friday and non-manufacturing activity on Wednesday.
The dollar which has fallen in recent weeks on rising expectations for FED interest rate cuts, rose 0.4%. Dollar index hit 96.611, which is the highest since June 21. Versus the euro the greenback rose 0.4% to $1.1327
The Japanese yen, which investors tend to buy when they are looking for safety, dropped 0.6% to as low as 108.53, its weakest since June 19.
The Swiss franc lost 0.4% versus the euro to 1.1142 francs. It also slumped 0.7% against the dollar to $0.9833.
The Australian dollar, sensitive to the economic fortunes of China, the country’s largest trading partner, dropped 0.4% at $0.6995. The weaker-than-expected factory data out of China overshadowing the trade ceasefire.
The sterling slipped 0.5% to $1.2638, hurt by the broad dollar rally. A survey showed Britain’s manufacturers suffering their sharpest fall in activity in more than six years in June.
Oil prices were up as OPEC and its allies looked on track to extend supply cuts until at least the end of 2019. Benchmark Brent crude has climbed more than 25% since the start of 2019. Brent rose as much as $2 on Monday toward $67 per barrel as traders cited OPEC’s resolve to curb output.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money