Analysts at ING express their after thoughts on the recent Chinese trade report, in the face of the impending US-China trade deal and its impact on the local currency.
“China's exports seem to be stabilizing, with electronic exports bottoming out. Imports, particularly soybeans and LNG, continued to fall substantially. This is probably a tactic in the trade negotiations. Though the market has reacted very positively to news about a Phase One deal, we are more skeptical about the size of the deal.
If it's too big, China could be more reluctant to return to the negotiating table later on, or the terms could be much harsher for the US in future deals, so we think the US is unlikely to agree to this. If it's too small, China may see the move as an insignificant concession that will do little to help its economy. It is difficult for the two sides to compromise on the size of the rollback, which seems to be the key factor in getting a deal signed.
We think USD/CNY will reflect these uncertainties once the market realises that the phase one deal is not a one-way bet.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility.