The president of the United States of America, Donald Trump, had recently announced his plans of pushing the second phase of negotiations with China to after the U.S presidential elections 2020 scheduled for November. A Chinese expert who works closely with the government on the trade negotiations, Gao Lingyun, stated on Friday in an interview with Global Times that a phase 2 trade deal between the two largest economies of the world after November may just be too far away.
Gao Lingyun Remarks On Trump’s Announcement
The expert further added that it would be in the best interest of China to move ahead with the second phase of negotiations at its own pace. He highlighted the implementation of the recently finalized phase 1 trade deal between the U.S and China to set the tone for the phase 2 negotiations for China. Lingyun was reported quoting while talking to Global Times:
“U.S President Donald Trump should not use the signature of a phase two deal with China as a bargaining chip for his presidential election in November”.
Neither the comments from the White House nor the Gao Lingyun’s remarks on Trump’s statement had a significant impact on the forex market. Nonetheless, as per a poll that covered senior forex strategists from across the globe, the Chinese Yuan is likely to be weighed by the upcoming events of the trade deal. The experts have recommended caution and have opinionated that Yuan’s recent hike in the currency market may turn out to be short-lived. They further added that with or even without a broader trade deal between the two parties, the Chinese currency can be expected to remain under pressure against the greenback in 2020.
Forecast For USD/CNY Amidst The Events Of The Trade War
The poll also highlighted the forecast that Yuan is likely to oscillate above and below the 7.0 mark in the next three months until finally, it settles around this level for the rest of the year. At the time of writing, the pair is trading at 6.92.
As for the phase 1 trade deal, President Trump has reiterated that it will be signed at the White House on January 15th or shortly thereafter. As such, the two parties are likely to close the deal by the end of the upcoming week. As per the current agreement, the U.S has agreed to roll back a few of the tariffs on Chinese goods as China pledged to exponentially increase its purchase of U.S agricultural products.