China to close US consulate in Chengdu, retaliation over Houston – SCMP

Dhwani Mehta FXStreet

Citing an unnamed source, the South China Morning Post (SCMP) reports that China is said to close the US consulate in Chengdu, in the face of the "retaliation over Houston".

Key quotes

China is moving to close the US consulate in the southwestern city of Chengdu in retaliation for the forced closure of the Chinese diplomatic facility in Houston on Tuesday.

The strategically important diplomatic outpost will be closed by Chinese authorities.

Washington maintains five consulates on the Chinese mainland – in Guangzhou, Shanghai, Shenyang, Chengdu and Wuhan – as well as a consulate general for Hong Kong and Macau.

This will likely escalate the ongoing tensions between the two countries. China vowed retaliation after the US closed its Houston consulate on Tuesday, to “protect Americans’ intellectual property and private information”.

Market reaction

The tepid market mood persists, with little reaction to the above reports. S&P 500 futures trade modestly flat while AUD/USD struggles to regain 0.7150. The US dollar extends its consolidative mode near multi-month troughs.

Author

Dhwani Mehta

FXStreet

Residing in Mumbai (India), Dhwani is a Senior Analyst and Manager of the Asian session at FXStreet. She has over 10 years of experience in analyzing and covering the global financial markets, with specialization in Forex and commodities markets.

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