USD/CNH trims gains as Navarro says US-China trade deal is intact

USD/CNH trims gains as White House adviser walks back on comments that China trade deal is over.
President Trump tweets that China Trade Deal is fully intact.

Omkar Godbole FXStreet Contributor

The offshore yuan (CNH) is trimming losses with White House advisor Peter Navarro walking back from his 30-minute old statement about the termination of the US-China trade deal.

"My comments have been taken wildly out of context. They had nothing at all to do with the Phase I trade deal, which continues in place. I was simply speaking to the lack of trust we now have of the Chinese Communist Party,” Navarro said a few minutes before press time, according to Bloomberg.

Navarro told Fox News earlier today that President Trump has decided to end the trade deal with China in light of the growing evidence that the coronavirus originated in Wuhan. Navarro's comments rocked financial markets, sending Yuan, Australian dollar, and other high beta currencies lower and anti-risk currencies like the Japanese yen higher.

USD/CNH jumped from 7.0590 to 7.0875 and is now trading at 7.0670, representing a 0.14% gain on the day. The pullback could be associated with the risk recovery, triggered by Navarro's clarification. The futures on the S&P 500 are now reporting a 0.14% drop, having declined as much as 1.2% about a half-hour ago.

Both President Trump and his economic adviser Larry Kudlow have now confirmed that the trade deal with China is not over. As a result, the futures could soon turn positive, pushing USD/CNH back to session lows.

Technical levels

1. R3 7.0993
2. R2 7.0901
3. R1 7.074
PP 7.0648
1. S1 7.0487
2. S2 7.0395
3. S3 7.0234

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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