Fears of a further exacerbation of the trade war between the United States and China are receding amid the news that representatives of the two countries will meet soon to start another round of trade negotiations. This prospect has had a positive effect on Asian stocks so far, allowing prices to increase. Chinese stocks, in particular, have had a strong day. American stocks also increased initially, but lost their gains as soon as Trump spoke against China.
Right now it is not certain how effective the negotiations would be. Just yesterday Donald Trump repeated his claims that China is artificially lowering its currency in order to attract investment and earn capital to cushion the blow of the United States’ tariffs on Chinese goods.
Furthermore, Trump took a swing at the Federal Reserve as well, as he has already criticized them a couple of times for their hawkish policy. According to Trump, raising interest rates and making the dollar stronger is hurting growth. However, the professional economic opinions support the Fed who are very patiently reacting to market trends and fundamentals - the consistent growth and positive reports are a testament to their good work, despite Trump’s comments. Still, this was enough to drag the dollar down and the DXY dropped to 95.49.
