The US Dollar has hit a one week low this morning as negotiations in Washington commenced between US and China.
Yesterday, it was reported that Trump had made the controversial decision to limit China visa issuance, escalating the situation.
The move to ban Chinese Nationals entering the USA followed the stance by the US President against the treatment of Muslims in the Xinjiang region.
The prospects of a trade agreement between the two nations kept market traders on edge as the dollar slipped.
However, if China were to change its stance and move to give compromise to the United States, this may add to the weakening of the Chinese Yen.
As trade talks commenced, the US Dollar fell by 0.3% to 9,884 representing a one week low.
Stuart Oakley, global head of flow FX at Nomura drew attention to Chinese Yen fix as he said “The USD/CNY fix (by China’s central bank) will be key to watch over the next 4-5 sessions. It’s been pegged around 7.0730 for several weeks. A move away from that level will give us a clear signal as to how the trade negotiations have gone.”
In the latest news from Washington, it seems that negotiations have reached a stalemate. China have refused to discuss forced technology transfers or the use of artificial intelligence.
If this continues to be the trend for negotiation talks, then negotiations may end earlier than scheduled for both Thursday and Friday.
However, Bloomberg have reported that Trump is willing to give concessions. This involves a currency deal in an attempt to gain electoral success.
Furthermore, investors and traders have also been waiting for further information. The updates to the Federal Reserves latest policy will dictate whether the Central Bank will cut rates or not.
Negotiations between China & US constantly ebb and flow, as China have been reported to accept a trade deal.
How these talks commence will dictate the changes in the Dollar, and as more information is released traders will be quick to pounce on short term fluctuations.
