14.10.2019: Investors unimpressed with US-China trade agreement (USD, JPY, AUD)


The trading week has kicked off with the publication on China’s trade balance as expected. What is more, market sentiment remains vulnerable to the news on the US-China trade conflict. The two-day trade talks between the US and China ended on a positive note. At least market participants were quite optimistic while evaluating information regarding the negotiation process. China agreed to resume purchases of the agricultural products, took into account comments on the regulation of the foreign exchange market as well as on the protection of intellectual property rights. In response, the US delayed the imposition of new tariffs on Chinese imports. Meanwhile, already imposed restrictions have significantly affected macroeconomic data from China. The report revealed that in September China’s trade balance rose to 39 billion 650 million dollars, exceeding the market forecast. This growth was due to the fact that the volume of imports dipped much more than the expected decline of 5.2% falling by 8.5%. Exports also sank by 3.2%, dropping to its lowest level in the last 7 years. Despite the experts’ predictions, the market movements were quite logical, given all the risks of the upcoming slowdown in the world economy. The yen was unable to sustain its bullish bias moving down from the level of 108.60. Now it is set to break the support level at 108.00. The decline of the Japanese currency was caused not only by risk aversion but also by the expectations of a key rate cut by the Fed. The Australian dollar tumbled after the release of weak China’s data. China is a large importer of Australian raw materials. So, naturally, the Aussie was weighed down by the news on the decline in China’s exports and imports, sliding to 0.6755. That’s all for now. Keep close tabs on financial markets with
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