Warring Headlines Fuel Trade War Rumors

Market newsAccording to headlines from the South China Morning Poston Wednesday, the upcoming deadline in the trade war between the United States and China is “likely to be missed.” Headlines from CNBC’s international edition, however, claim that “Eleventh Hour US-China Trade Deal Could Happen Before Tariffs Kick in Sunday.” The conflicting headlines, just a sample of many that have been circulating online and in print, have alternatively confused traders, worried them, and boosted optimism. The result has been volatile markets across the board, including in the global stock arena, the currency markets, and the commodities markets.

According to Wendy Cutler, a former U.S. trade official who was quoted in the South China Morning Post, the two sides are very close to a deal, but “the last mile is always the most difficult.” She explained that it’s especially important for China to rlease news of a balanced deal, which Beijing believes not just cancelling the upcoming tariffs, but also rolling back some of the existing tariffs. Reports out of Washington indicate that President Trump is unlikely to make such a substantial concession.

CNBC quoted analyst Kenny Polcari of Statestone Wealth, who predicts that a last-minute deal will come through, which will boost markets significantly. They also added a viewpoint from Eric Robertson of Standard Chartered Capital, who predicted that even if a deal isn’t made before Sunday, a delay on collection of the new tariffs could be possible, which could show a sign of good faith and work wonders in reaching a trade deal.

The currency markets were seeing little movement on Wednesday afternoon in Asia, perhaps partly due to trade confusions, and largely due to traders standing aside and waiting for a signal from the U.S. Federal Reserve following its policy meeting later today.

The U.S. dollar index was higher, up 0.11 percent to 97.52 as of 1:59 p.m. HK/SIN, as the greenback advanced against both the pound and the euro following several days of a downtrend. The sterling eased 0.14 percent against the dollar, to trade at $1.3136, while the euro eased 0.05 percent against the dollar to trade at $1.1087. The dollar was also trading up against the yen, gaining 0.06 percent to 108.76.

Asian stock markets were mostly higher after a day of mixed performance on Tuesday. Japan’s Nikkei 225 was down 0.16 percent, while most other indexes were in the green. Hong Kong’s Hang Seng Index jumped 0.54 percent, South Korea’s Kospi was up 0.39 percent, and Australia’s ASX 200 was up 0.68 percent. The Shanghai Composite was also up 0.24 percent, while the Shenzhen Composite eased 0.33 percent.

Sari Holtz

Sari Holtz began working at DailyForex in 2011 when she was hired to provide daily news analysis and to manage the daily content. Since then, she has continued to provide regular news items that focus on how political events impact the global economy. She also works directly with dozens of Forex brokers worldwide to ensure that they get their messages across and that traders can find the best broker for their individual needs.