Sun, January 29, 2023

FX Market Anxious Over Trade News | WibestBroker

fx market concept, dollar and yuan bills – wibestbroker

The FX market moved cautiously, even anxiously, yesterday after news broke out that China was sulky over a US bill that aimed to support Hong Kong protesters.

US President Donald Trump might sign the bill, according to reports, and China didn’t like this.

China’s foreign ministry said that “negative consequences” were coming. It noted that such a decision by the US as interference in China’s domestic affairs.

The news’ timing was also unfavorable. It came after Trump said he would raise tariffs if China didn’t sign the “phase one” trade deal.

According to one Tokyo analyst, tensions between Washington and Beijing were spreading “from trade to questions about China’s human rights.”

As a result, the safe-haven yen rose against the buck, while the yuan fell to a three-week low in onshore trade.

Hong Kong has been suffering from increasingly violent protests against Chinese rule.

FX Market Figures: Japan, Eurozone, US-China Deal

Overall, the forex market rolls on several figures on the global economic stage.

The US-China trade deal progress remains the primary driver for many currencies. Tensions and pessimism are still dominant among traders, boosting safe-haven assets like the yen and government bonds.

According to trade experts, the completion of the US-China “phase one” trade deal could slide into next year.

Meanwhile, Japan and the US have hammered out a mini trade deal. Japan’s Lower House has ratified the agreement, but US Democrats are lambasting Trump for it.

According to them, the Trump administration failed to offer details and did not consult the Congress while negotiating. The US-Japan trade deal slashes tariffs on farm and industrial products.

As for the eurozone, Morgan Stanley analysts are predicting a pickup in the eurozone economy in 2020. The improvement will then lead to a rally in the euro-to-dollar exchange rate.

According to them, leading indicators are showing signs that the economy has bottomed. A reversal may be imminent.

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