TheÂ Chinese yuan is spiking onÂ Thursday after President Donald Trump tweeted that theÂ US andÂ China are âvery close toÂ aÂ big deal.â Mirroring theÂ financial markets, theÂ yuan pared its earlier losses andÂ is rallying onÂ theÂ news. TheÂ yuan could end theÂ week higher following this weekâs upbeat economic data. But could theÂ yuan exit theÂ 7 territory against theÂ US dollar toÂ close out theÂ year?
With just days until theÂ December 15 deadline toÂ impose 15% tariffs onÂ theÂ remaining $156 billion inÂ Chinese goods, President Trump will be meeting with his top trade advisers toÂ discuss whether toÂ delay theÂ next round ofÂ levies. But theÂ president could be signaling that theÂ worldâs two largest economies are inching closer toÂ theÂ first phase ofÂ aÂ trade agreement.
He sent out aÂ tweet that rocked markets:
âGetting VERY close toÂ aÂ BIG DEAL with China. They want it, andÂ so do we!â
Beijing has yet to make a statement.
Just minutes after theÂ tweet, theÂ equities market pared its losses andÂ sparked aÂ huge rally. TheÂ Dow Jones Industrial Average jumped 230 points, theÂ Nasdaq rose 70 points, andÂ theÂ S&P 500 surged toÂ aÂ record high byÂ tacking onÂ nearly 30 points.
TheÂ Chinese yuan was trading lower against most ofÂ its major currency rivals, but then there was aÂ huge spike forÂ theÂ currency after Trumpâs tweet.
OnÂ theÂ data front, new motor vehicle sales year-on-year fell toÂ 3.6% inÂ November, anÂ improvement from theÂ 4% contraction inÂ October. TheÂ 12-month inflation rate came inÂ atÂ 4.5% last month, up from 3.8% inÂ theÂ previous month. TheÂ producer price index (PPI) slumped 1.4%. Outstanding loan growth soared 12.4% andÂ new yuan loans advanced about $200 billion inÂ November.
TheÂ USD/CNY currency pair tumbled 0.26% toÂ 7.0206, from anÂ opening ofÂ 7.0388, atÂ 14:05 GMT onÂ Thursday. TheÂ EUR/CNY declined 0.18% toÂ 7.8067, from anÂ opening ofÂ 7.8205.
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