Tokyo, News by Reuters- They looming doubts over the possibility of a positive outcome of the impending Preliminary Trade Deal between the United States and China, helped to lift the value of some safe haven currencies, such as the Japanese Yen and the Swiss Franc on Thursday. This situation has pulled down Yuan further to a lower level.
The retail sales of China, its industrial output and its investment data was weaker than expected, which added to the pressure. It helped sending the Australian Dollar to one month low level, which was already knocked by soft local employment data.
The Wall Street Journal reported on Wednesday that Beijing seems to be reluctant in signing a deal that appears to be one sided in favor of the United States only. It further stated that these US China trade negotiations have reached a point of standstill over farm purchases issue. This Journal cited people familiar with this matter.
This report from Wall Street Journal came after US President Donald Trump said that a trade deal with China was “close”. But he did not give any related details and gave a warning that he would raise tariffs on Chinese goods substantially, if there was no deal.
Yuan and other risk sensitive currencies experienced a raise in value after the possibility of the two economic powers to sign a “Phase One” pact to end their trade war in an agreement, boosted the optimism in global financial market.
Mr.Makoto Noji, Chief Currency and Foreign Bond strategist at SMBC Nikko Securities said that “If President Trump takes a hard line from by the latest strength in stock market and refuses to make some concessions to China, there will be risk an agreement cannot be reached at the last minute”.