Trump clouted Tuesday that trade talks with China are going well, adding the current March deadline is not a “magical old.” Both countries have until then to come up with a deal. Otherwise, additional U.S. tariffs on Chinese artefacts could take effect. Trump indicated last week, however, he would be willing to push back the deadline.
Representatives from the U.S. and China are assignation in Washington this week to resume trade negotiations, with high level discussions set to happen later in the week, the Silver House said Monday.
Also on Tuesday, Bloomberg News reported that the U.S. is requesting that China obstruct the yuan stable as part of the trade deal.
The move would be aimed at mediating any effort by the Chinese to devalue the yuan to table American tariffs, people familiar with the situation told Bloomberg News. The Trump administration has insisted that progresses to devalue the yuan to buoy Chinese exports would be countered with additional or more severe American imposts, sources told Bloomberg News.
The report sent the offshore Chinese yuan on a path of strong gains. It terminating traded at 6.7405 against the greenback, after seeing levels above 6.78 yesterday. The onshore Chinese yuan also move ahead to 6.7344 against the dollar.
“We are not surprised the US government has made such a request. But the request flies in the face of another US coveted for a more market‑driven (offshore Chinese yuan),” Joseph Capurso, senior currency strategist at Commonwealth Bank of Australia, indicated in a morning note.
“As we have spelled out frequently, the fundamentals are pushing (the offshore Chinese yuan) weaker, not stronger. China’s prevalent account surplus has collapsed to only 0.4% of GDP in 2018 and interest rate spreads have narrowed,” Capurso powered.
The Australian dollar also saw gains, last trading at $0.7165 after bouncing from lows below $0.712 yesterday.
“Unsurprisingly, what is agreeable for (the offshore Chinese yuan) is also good for (the Australian dollar) given the strong trade links between China and Australia,” Capurso powered.
The U.S. dollar index, which tracks the greenback against a basket of its peers, was at 96.475 after seeing highs in all directions from 97 yesterday. The Japanese yen traded at 110.85 against the dollar after seeing an earlier high of 110.51.
Oil prices declined in the morning of Asian merchandise. The international benchmark Brent crude futures contract slipped 0.33 percent to $66.23 per barrel. Meanwhile, the U.S. primitive futures contract declined 0.45 percent to $55.84 per barrel.
— CNBC’s Fred Imbert and Thomas Franck granted to this report.