Trump signs pro-democracy bill, USD/CNH spikes up - ING

Dhwani Mehta FXStreet

Robert Carnell, Chief Economist Head of Research, Asia-Pacific, at ING Bank talks about the emerging signs of stabilization, especially after Trump signs Hong Kong SAR pro-democracy bill into law and there is no evidence of any spillover to Asia from the currency turmoil in Latam.

Key Quotes:

“I had been wondering if President Trump was just going to leave Congress' pro-democracy bill on his desk and pretend it had not arrived. I don't think he wants to inflame trade tensions.

And I get the sense that he sees this as a problem for China and Hong Kong, and maybe is reluctant to get involved. He also knows that President Xi will not be impressed with this, and he has a lot of time for him.

Having said that, he has now just signed the bill, so any speculation over whether he would or not is now totally redundant. This is probably why USDCNH has spiked higher today - I can't see any other reason for this. but it already seems to be coming off again as I write.

We aren't of the view that this changes a great deal, either on the trade front, or in terms of any potential for renewed protesting in HK, though Iris mentioned when chatting to her today that the sources she follows indicate a return to protests shortly.“

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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