The risks of trade war have weakened
At Tuesday’s trades, tensions around the US-China trade war eased. Earlier, the reason for this exacerbation was the statement by China on the abandonment of the US agricultural products and the weakening of the Chinese yuan against the US dollar and world currencies. This was perceived by the market as a response by China to a new 10% duty from the United States, which will take effect on September 1. In fact, the weakening of the Chinese currency has become a major factor in the aggravation of risks, since D. Trump has repeatedly accused China of manipulating the national currency.
Overcoming the renminbi against the US dollar at 7 yuan per dollar was a breakdown of a significant psychological level. On Tuesday, the market shows restraint and correction after pessimistic sentiments. So, European stock indices opened with a moderate growth in narrowing risks. The reason for this was the stabilization of the growth of the USD/CNY pair. The stabilization of the renminbi was caused by the intervention of the Chinese government. The return of this pair to the mark of 7.000 may cause a decrease in trading tension.
Fig. USD/CNY chart. Current price – 7.030
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Hanzenko Anton
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