Cancellation of the APEC summit in Chile is not a big obstacle for China and the US to sign a trade deal - GT
- Cancellation of the APEC summit in Chile is not a big obstacle for China and the US to sign a trade deal.
- So long as a trade deal is on the cards - risk on will be the theme.
The Global Times has tweeted that the cancellation of the APEC summit in Chile is not a big obstacle for China and the US to sign a trade deal as long as they reach one, according to Mei Xinyu, an expert affiliated with the Chinese Commerce Ministry”.
- If China and the US were to sign an interim trade deal, as they appear to do so, and top leaders of the two countries were to meet for a signing ceremony, it would be in a neutral third-party country: Mei Xinyu.
FX implications:
Neutral/Bullish for risk and supportive of AUD crosses. The Aussie is the one to watch with respect to trade war – China is Australia's largest trading partner in terms of both imports and exports and Australia is China's sixth-largest trading partner and a two-way investment relationship is also developing. The Yen is also one to watch, as investors scramble from risk asset allocations at times of uncertainty when the Yen picks up a safe haven bid.
So long as a trade deal is on the cards, investors will seek a higher return on their capital and thus, AUD/JPY should attract demand - AUD/JPY is currently higher by +0.14% on the day so far. (AUS Consumer Price Index was favourable for AUD overnight, in line with expectations and not poor enough to cement a Reserve Bank of Australia rate cut.
Author
Ross J Burland
FXStreet
Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.
