SHANGHAI, – China’s yuan slipped against the dollar on Friday, as U.S. President Donald Trump and Chinese leader Xi Jinping held a much-anticipated call but left key issues that have stoked tensions unresolved for future talks.
During the more than one-hour-long call, Xi told Trump to back down from trade measures that roiled the global economy and warned him against threatening steps on Taiwan, according to a Chinese government summary.
“Although the likelihood of a U.S.-China deal increases with more high-level dialogues, investors remain skeptical that both sides are merely buying time to address some pressing issues,” said Gary Ng, senior economist at Natixis.
“The call does not offer much comfort in cutting tariffs, but only touching on access of critical materials and tech export control. Therefore, there is no certainty of what kind of deal will be made, and it may only be a partial one given the wide range of issues between the U.S. and China.”
As of 0243 GMT, the onshore yuan was 0.07% lower at 7.1837 per dollar, while its offshore counterpart was down about 0.06% to 7.1808.
“The talk itself should lift market sentiment, but Trump’s erratic policies make it hard to convince investors,” said a trader at a foreign bank.
Wang Zhuo, partner of Zhuozhu Investment in Shanghai, echoed the view. “Trump fickleness has made such talks less and less meaningful to the market,” he said, but added that direct communications were helpful for removing some misunderstandings.
Trade talks between the world’s two largest economies had stalled after a meeting in Geneva last month, where both sides agreed to temporarily roll back most of the tariffs imposed on each other’s goods since April. Trump has accused China of violating the bilateral deal.
Prior to the market opening, the People’s Bank of China set the midpoint rate at 7.1845 per dollar, its strongest since May 26 and 90 pips firmer than a Reuters’ estimate of 7.1935. The spot yuan is allowed to trade 2% either side of the fixed midpoint each day.
This article was generated from an automated news agency feed without modifications to text.
