Dollar index inched up after weakening yesterday due to dovish expectations from Federal Reserve as markets focused on today’s statement due to be released after FOMC meeting while gold prices could not hold tight at $1,310 reached yesterday and lost value on Wednesday. U.S. President Donald Trump said trade talks were going very well while it is announced that U.S. officials would be visiting China next week to resume high level trade talks. According to Bloomberg, China side is claimed to change their stance due to reluctance of U.S. in lifting tariffs to Chinese goods despite concessions made on conflicting issues like intellectual property rights. In the meantime, while the UK Prime Minister Theresa May is expected to deliver a formal letter to request an extension of Article 50, EU’s chief Brexit negotiator Michel Bernier said, the UK should give a clear purpose for why the departure date needs to be delayed.
While today’s Fed statement to be released after two-day meeting is under spotlight, dollar index edges up on rising trade tension and weighs on gold prices.
As of 15:17 GMT+3, spot gold was trading at $1,305.61 an ounce while dollar index edged up to 96.41. U.S. 10-year Treasury yield inched down to 2.60.
Trade talks are going very well, said U.S. President Donald Trump on Tuesday, while it is announced U.S. trade representative Robert Lighthizer and Treasury Secretary Steven Mnuchin would be heading to China for next round of trade talks. It is claimed trade talks between U.S. and China were now in its last stages while two sides would likely be finalizing a trade deal till the end of April. Trump already said he was not in rush to reach a trade deal with China and a possible trade deal would need to be including important issues like protecting intellectual property rights.
According to Bloomberg, Chinese officials changed their stance in trade talks due to Washington’s reluctance of lifting tariffs on Chinese goods. While Chinese officials are uncomfortable with U.S. not guaranteeing lifting tariffs despite the promises made on issues like protecting intellectual property rights and technology transfer, trade uncertainty remains as Chinese are claimed to step back from initial promises on U.S. demands. Trump administration officials have not announced any kind of plans to ease or completely lift trade tariffs yet. On the contrary, it was claimed that U.S. wanted to use tariffs as a threat to make sure China kept the promises on their side of a possible trade deal.
In the meantime, while British Prime Minister Theresa May said she had written a letter to request an extension of Article 50 till June 30, EU’s chief Brexit negotiator Michel Bernier said there should be an acceptable reason for a short or long term delay to the departure date. Bernier said, it should be guaranteed that the situation would not come back to the same point where it is now after a possible extension while stating that an extension without a plan would cause economic and political costs to the EU. Bernier also warned PM Theresa May should not take it for granted that EU will accept an extension of Article 50 and underlined no-deal Brexit is still possible even though British parliament rejected it. The parliament rejected May’s Brexit deal for the second time and requested an Article 50 extension last week.