The United States and China are getting close to a trade agreement, White House economic adviser Larry Kudlow said.
He cited what he called very constructive talks with Beijing about ending a 16-month trade war. White House’s Kudlow said negotiators for the world’s two largest economies were in close touch via telephone. However, he gave no further details on the timing of a possible deal.
On Tuesday, U.S. President Donald Trump said a trade deal with China was “close” but offered no details. He warned that he would raise tariffs “substantially” on Chinese goods without such a deal. Markets soured after U.S. President Donald Trump on Tuesday said he could impose substantial new tariffs on China if no deal was reached.
The United States and China have been locked in successive waves of tit-for-tat tariffs that have roiled financial markets. Such trade saga threatened to drag growth in the global economy to its lowest rate since the 2007-2008 financial crisis.
Markets are anxiously awaiting an agreement to end uncertainty that has slowed business investment around the globe. Further, automakers around the world are awaiting a decision from U.S. President Donald Trump. The question is whether he will impose up to 25% tariffs on U.S. car and auto part imports after a 180-day review period elapsed this week.
START TRADINGForex – White House sends positive trade signals
Optimism that the United States and China may soon end their trade war after Kudlow’s comments lifted trade-exposed currencies on Friday at the expense of safe-haven assets such as the yen. The dollar and riskier trade-exposed currencies found some support on Friday.
Against a basket of six major currencies the US dollar was steady at 98.140. Caution and the lack of concrete news in White House remarks kept a lid on risk appetite.
The Canadian dollar was nearly unchanged against its U.S. counterpart on Friday, steadying after it hit a one-month low the day before. Investors grew more hopeful of a U.S.-China trade deal. The loonie was trading nearly unchanged at 1.3244 to the greenback, or 75.51 U.S. cents.
The dollar rose 0.3% versus the yen, last at 108.730, suggesting an end to the past week’s dollar-yen slump may be in sight.
The Swiss franc weakened 0.1% versus the dollar. The Swiss currency recovered to trade at 1.09185 per euro, up 0.2% on the day.
The New Zealand and Australian dollars firmed slightly on the news, the latter rising off four-week lows.
The euro is set for its biggest weekly fall against the franc since early August, being last up 0.1% versus the dollar.
The Sterling was down around 0.1% at $1.2874, but on track for modest weekly gains, up around 1% since last Friday. Versus the euro, the pound was little changed at 85.62 pence, having strengthened to fresh six-month highs. This rally puzzled analysts in late London trading on Thursday.
PLEASE NOTE The information above is not investment advice.
Sources: Reuters, Investing, CNN money