- New trade talks have been scheduled for later this month
- Dollar weakens slightly after announcement
- Chinese Yuan strengthens on this news
Markets are responding to the news that, before the end of this month, China will send a delegation under the leadership of Vice Commerce Minister Wang Shouwen to the United States to hold trade discussions with an American group led by the Undersecretary of the Department of the Treasury, David Malpass.
The reaction was fairly muted, however, with little more occurring than a few stops being triggered. Similar high-level discussions in May led to an agreement that was wiped off the table by President Trump immediately afterwards.
The US-China trade war worsened in June, so analysts are understandably skeptical. On the other hand, dialogue makes sense here, and one can expect a certain amount of follow-through as Europe comes forward with its reaction.
Stock markets responded rather cautiously to the developments.
Before this announcement, forex markets were quiet. The USD had slipped a few points against the JPY. The AUD and the EUR softened slightly against the US dollar. As far as Australia is concerned, the jobs report data for July was released. The headline employment figures missed projections by a wide margin, but the rest of the details were fairly encouraging and showed positive revisions.
The People’s Bank of China set a lower reference rate for the onshore CNY (a lower level for the CNY against the USD) once again yesterday, but after the news of the trade discussions broke, the yuan strengthened nevertheless.