Dollar lightly changed ahead of European trading

And that’s about it. After two days of long talks, both sides are content to work out a plan or framework to ease tensions just that little bit more. The headlines in case you missed them:

• Chinese Vice Commerce Minister Li Chenggang says talks with US on trade rational, candid
• Lutnick says reached a framework with China, if approved will implement Geneva agreement

There’s nothing too spicy with little in terms of any major optimism either. If all goes according to the “plan”, China should ease some restrictions on its rare earth exports. In turn, US will then ease their own barriers on key technology exports.

As mentioned here, this all feels like just some added gesture of goodwill to get to the next stage of talks. We’re still not quite addressing the core issues on trade between the two countries. And who is to say that either side will keep their end of the bargain in the long-term. Remember the whole soybeans deal back in 2019? China certainly didn’t keep up with buying more of US soybeans even after the now failed Phase One trade deal at the time.

For now, let’s see how big a deal Trump wants to make of this. If anything, don’t expect China to share that enthusiasm.

Ahead of European trading today, the dollar is looking more tentative after the back and forth moves overnight. EUR/USD continues to hold just above 1.1400 with USD/JPY sticking closer to 145.00 for now. Meanwhile, AUD/USD is still finding it hard to break the shackles and firmly clear the 0.6500 mark.

The light changes in the dollar comes as US futures are also seemingly more cautious. S&P 500 futures are down 0.3% after the slight gains yesterday.

This article was written by Justin Low at www.forexlive.com.