US China Tensions Thawing? – Asia Market Wrap

Asian currencies advanced amid broad weakness in the dollar and US assets as investors awaited further progress on trade deals. Crude oil slumped 3.6% after OPEC+ agreed to a further surge in output.

A gauge of regional currencies rose, with the Taiwan dollar surging as much as 5% in the biggest intraday gain in over three decades, and the Malaysian ringgit rising 1% to the highest since October. The dollar declined for a second day and US equity-index futures dropped 0.7%, after President Donald Trump said he had no plans to talk to his Chinese counterpart this week. Gold rallied as much 1%. There’s no cash trading in Treasuries in Asia as Japan is closed for a holiday, along with markets in Hong Kong and China.

A combination of repatriation buying and traders seeking alternative investments amid the “sell America” wave has helped Asian currencies strengthen recently. Financial markets have steadied in the past two weeks – the S&P 500 on Friday posted its longest winning streak in two decades – amid signs that talks with Asian nations are progressing and trade tensions between China and the US are thawing.

Trump suggested that his administration could soon strike trade deals with some countries. The president also said in an interview Sunday on NBC that he’s willing to lower the tariff on Chinese imports to spur trade. He also signaled that his aides are having conversations with counterparts from China. Last week, the Asian nation said it’s evaluating talks with the US.