NEW YORK (Reuters) – China’s yuan was slightly weaker on Tuesday after earlier hitting its highest level since July, while the Japanese yen dropped to eight-month lows before the United States and China are due to sign a preliminary trade agreement to ease their 18-month old tariff war.
The U.S. Treasury Department on Monday reversed its designation of China as a currency manipulator in what is seen as a conciliatory gesture ahead of the signing on Wednesday.
Risk - Sentiment - Demand - Assets - Yen
Risk sentiment has improved and demand for safe-haven assets like the yen have decreased on signs that the two countries are closer to de-escalating the trade war that has been blamed as a major headwind to global growth.
The trade deal “doesn’t address the structural issues, but at least for markets it reduces some of the stress and some of the anxiety and uncertainty that plagued the markets throughout 2019,” said Mark McCormick, North American head of FX strategy at TD Securities in Toronto.
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