On Tuesday, the 14th of January 2020, following reveal of reports that the United States and China had no arrangements to ease tariffs in future as part of their “Phase One” trade deal, money markets were rattled at the later part of the session, while demands of safe-haven equities and currencies soared and investors in the global equity markets had been bracing for impact as Wall St.
on Tuesday (January 14th) pared earlier gains following reveal of the report, and Asian markets opened Wednesday’s (January 15th) market broadly lower. On top of that, in the FX market, safe-haven currencies such as Japanese yen and Swiss Franc, demands of which usually spurred up in times of geopolitical hobbles, added solid gains as FX markets appeared to be getting equipped for a flight-to-safety response following release of the 85-page “Phase One” Washington-Beijing trade deal.
Apart from that, despite commitments from the Beijing to purchase at least $200 billion of US farm goods, questions were raised on how China could capitalize on such large scale of farm goods given its pre-existing contracts with Brazil, the largest economy in South America, suggested analysts.
Amid such a garrulous outlook in geopolitical events, Japanese Yen ended the day almost flatlined to 109.98 per US Dollar after falling as much as 0.30 per cent to 110.20 per US dollar earlier in the Asia-Pacific trading hours, while another safe-haven currency Swiss Franc, which United States had recently added in its shortlist of currency manipulator extended its four day long rally to wrap up Tuesday’s (January 14th) session with a gain of 0.37 per cent to $0.9670.
More importantly, the Swiss currency had been solidly extending its seven-week long streak of straight gains amid wears and tears over a much-debated Sino-US “Phase One” trade deal, while it had already gained 0.53 per cent over the first two days of trading this week.