TALKING POINTS – AUD/USD, HUAWEI, US-CHINA TRADE WAR
The Australian Greenback could fall this week amid commerce battle talks
Huawei scandal and arrest of CFO complicating negotiations
Will China and the US be capable of resolve commerce dispute in time?
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The Australian Greenback would possibly tumble this week amid fears that commerce talks between Vice Premier Liu He and Treasury Secretary Steven Mnuchin could fall out. This comes after Australia’s NAB Enterprise Confidence Survey fell in need of expectations and despatched the Aussie decrease.
Towards this backdrop is the scandal involving Chinese language tech large Huawei and the arrest of its CFO Meng Wanzhou. The US Division of Justice right this moment filed an indictment towards the agency on accounts of fraud and breaking US legal guidelines and is formally requesting extradition of Meng from Canada.
The Chinese language authorities responded by asking the US to withdraw the arrest order and claiming that the fees are unfair and unethical. This places an already strained US-China relationship below larger duress proper earlier than the delegation from Beijing arrives in Washington on January 30.
The US and China agreed to 90-day ceasefire in December that ends on March 1. If a deal between the 2 events can’t be negotiated, the Trump Administration has threatened to impose tariffs as much as 25 % on $200 billion value of Chinese language items. Such an consequence would nearly definitely impression the Australian Greenback. Slower Chinese language progress this 12 months from the commerce wars in 2018 has additionally weighed down on the foreign money.
AUD/USD – Every day Chart
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— Written by Dimitri Zabelin, Jr Forex Analyst for DailyFX.com
To contact Dimitri, use the feedback part beneath or @ZabelinDimitrion Twitter