Chinese Yuan Soars As Trump Tweets ‘Very Close to a Big Deal’

The Chinese yuan is spiking on Thursday after President Donald Trump tweeted that the US and China are “very close to a big deal.” Mirroring the financial markets, the yuan pared its earlier losses and is rallying on the news. The yuan could end the week higher following this week’s upbeat economic data. But could the yuan exit the 7 territory against the US dollar to close out the year?

With just days until the December 15 deadline to impose 15% tariffs on the remaining $156 billion in Chinese goods, President Trump will be meeting with his top trade advisers to discuss whether to delay the next round of levies. But the president could be signaling that the world’s two largest economies are inching closer to the first phase of a trade agreement.
He sent out a tweet that rocked markets:

“Getting VERY close to a BIG DEAL with China. They want it, and so do we!”

Beijing has yet to make a statement.
Just minutes after the tweet, the equities market pared its losses and sparked a huge rally. The Dow Jones Industrial Average jumped 230 points, the Nasdaq rose 70 points, and the S&P 500 surged to a record high by tacking on nearly 30 points.
The Chinese yuan was trading lower against most of its major currency rivals, but then there was a huge spike for the currency after Trump’s tweet.
On the data front, new motor vehicle sales year-on-year fell to 3.6% in November, an improvement from the 4% contraction in October. The 12-month inflation rate came in at 4.5% last month, up from 3.8% in the previous month. The producer price index (PPI) slumped 1.4%. Outstanding loan growth soared 12.4% and new yuan loans advanced about $200 billion in November.
The USD/CNY currency pair tumbled 0.26% to 7.0206, from an opening of 7.0388, at 14:05 GMT on Thursday. The EUR/CNY declined 0.18% to 7.8067, from an opening of 7.8205.

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Original from: www.earnforex.com