USD: Not much news out of South Korea – Commerzbank
|Not long ago, the long anticipated meeting between Donald Trump and Xi Jinping came to an end, but just from looking at the fx markets you might have missed it. That is because, at least for currencies, there was not much news there, at least initially (There has been no comment from the Chinese side yet), Commerzbank's FX analyst Volkmar Baur notes.
Currency markets are likely to to continue watching the political space
"On the plane flying back to Washington Trump said that the meeting went amazing, but did not really have much details to back this assertion up. He mentioned that China would restart buying soybeans, that the US would lower the tariff rate by 10 percentage points and that China would postpone its implementation of the extended rare earth licencing system by one year. All of this had already been known however after the US-China meetings in Malaysia earlier this week."
"Trump did announce that he would be travelling to China in April, which would give the impression that he can expect some stability in the US-China relationship over the coming month. However, the meeting in South Korea did not prevent the situation to escalate in the beginning of October, so maybe one should not read to much into that as well."
"Moreover, the postponement of high tariffs on Chinese products will also expire on November 10. Currency markets will have to continue to watch the political space closely, and surprises and hence volatility are always a possibility. But at least for now, this meeting did not bring any."
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