The Chinese yuan is rising ahead of several currency pairs as the worldâs second-largest economy prepares to restart trade negotiations with the US. Before even beginning the talks, it is being reported that Beijing is becoming hesitant to reach a broad trade agreement. Chinese officials reportedly do not want to cave to Washingtonâs chief demands, meaning that the discussions might endure a premature end.
Citing sources close to the situation, Bloomberg News is reporting that senior officials have brought a list of items they wish to discuss. Global financial markets are panicking now that the range of topics has ostensibly narrowed considerably.
Vice Premier Liu He, who is leading the delegation in Washington this week, will not put industrial policy reforms or government subsidy changes on the table. For Beijing, those subjects will not be debated, though they are the primary concerns of President Donald Trump and his administration. The White House has long complained that these two policies are creating an unfair global trade environment.
Although sources are noting that the US impeachment inquiry is not affecting plans or negotiations, analysts note that China is attempting to strengthen its hand as impeachment uncertainty surrounds the talks.
Meanwhile, the president reiterated his support for an all-encompassing trade deal. He told reporters:
Weâve had good moments with China. Weâve had bad moments with China. Right now, weâre in a very important stage in terms of possibly making a deal. But what weâre doing is weâre negotiating a very tough deal. If the deal is not going to be 100% for us, then weâre not going to make it.
But individuals close to President Trump think that he might be willing to accept an âearly-harvestâ agreement, or a mini-deal, as long as broader discussions continue. It might be a compromise to stop the bleeding in global financial markets and the manufacturing industries worldwide.
On the data front, Chinaâs foreign exchange reserves declined by $14.7 billion to $3.092 trillion in September, according to the Peopleâs Bank of China (PBOC). This is higher than the market forecast of a $6 billion drop to $3.101 trillion. Gold reserves rose for the 10th consecutive month to 62.64 million ounces, or $93 billion.
The USD/CNY currency pair dipped 0.01% to 7.1484, from an opening of 7.1485, at 10:11 GMT on Monday. The EUR/CNY fell 0.12% to 7.8443, from an opening of 7.8537.
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