US China trade, currencies in focus

Asia Pacific markets rose on Friday morning as investors reacted to a report that said American officials were weighing the possibility of easing tariffs on China, in a bid to push forward trade talks.

that “there’s no discussion of lifting tariffs now.”

Analysts at Eurasia Group said that President Donald Trump and Chinese leader Xi Jinping’s desire to avoid tariff escalation reduces the probability of talks breaking down within the first half of the year.

“Fearful of the negative reaction of jittery markets to a collapse of talks, the two sides have taken a constructive approach, refusing to let lateral geopolitical, Iran sanctions, and cyber-related tensions sink negotiations,” the analysts said in a note.

“Rather than reach a comprehensive agreement by the theoretical deadline of 1 March, the two sides will extend talks,” they added, saying the extension could be for another 90 days.

Thursday’s report from the WSJ also sent U.S. stocks higher overnight.

Elsewhere, the U.S. president canceled his delegation’s trip to the World Economic Forum, citing the ongoing partial government shutdown.

The U.S. dollar index, which tracks the greenback against a basket of its peers, last changed hands at 96.065.

The yen, viewed as a safe-haven asset, traded at 109.29 at 8:38 a.m. HK/SIN, weaker than levels near 108.00 earlier in the week. The Australian dollar was at $0.7198 after seeing earlier lows of $0.7183.

— CNBC’s Fred Imbert contributed to this report.

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