Nordvig said the dollar should continue to slide as talks go on, as long as they are positive. “The central case is we will see progress, and if we get to the finish line is yet to be seen,” Nordvig said. “The negative aspect is we don’t have strong global growth. We really need to have the relief from this. Otherwise, we’re going to sit on a spot where the economy doesn’t have much momentum”
Wall Street Journal reports that China is discussing revising aspects of its “Made in China 2025” to dominate emerging technologies and open its markets more to foreign companies show another big sign of China’s commitment to the talks, said Nordvig. He said its economy is already showing signs of strain from the 10 percent U.S. tariffs, evident in trade data, and an increase to 25 percent on $200 billion in goods would be even more harmful.
For the U.S., strategists said trade concerns could hit the economy through delayed business spending, as companies wait to see the outcome of talks. Tariffs could also show up as higher prices for consumers on some goods.
Chandler said it is unclear whether the talks will lead to a deal, but for now they look promising.
“A pretty bad sign would be if we saw the RMB weakening when it ought not to be,” said Chandler. “We won’t know that for awhile.”