Amid increasing geopolitical tensions in the Middle East (incl. UN talks), adding up with North Korean threatening of summit cancellation, the US government is strongly solicited in the last few weeks. After a first unsuccessful negotiation session in Beijing in an attempt to unblock the situation, China’s economic advisor, Liu He, is in visit in Washington to discuss the matter. The meeting is set to be hard since last week’s US trade representative requested China to cut a total amount of $200 billion trade surplus by 2020, enforce intellectual property protection and decrease technology subsidies, putting doubt on a rapid diplomatic talk resolution ($150 billion tariffs against China are expected to come into effect next Tuesday). In addition, Trump’s attempt to calm the situation by lowering ZTE penalty rapidly vanished since US lawmakers recently rejected ZTE trade ban easing plan.
Unsurprisingly, the first topics discussed during the second week of negotiations concern trade issues and will be focusing on Chinese imports, certainly in an attempt to increase US-agro product exports trade in the future.
Expected to increase in the mid-term (+1.48% month-to-date and +0.56% week-to-date), USD/CNY pair is currently trading at 6.3695, slightly decreasing and heading along the 6.3625 range in the short-term.
By Vincent Mivelaz