Commodity currencies surge as Mnuchin pitches idea of rolling back China tariffs

In hopes of improving trade talks with China, Treasury Secretary Steven Mnuchin reportedly proposed the idea of lifting some or all the tariffs. The Wall Street Journal noted that the President has made clear he wants a deal – and is pressing Mr. Lighthizer to deliver one. US Trade Representative Robert Lighthizer, a longtime hard-liner on China, is running point on trade talks and if the US eases off on China, that could be very positive for risk appetite.

The commodity currencies all surged following the breaking news. AUD/USD climbed over 40 pips, while the USD/CAD fell 45 pips.

Dow Jones Industrial also broke out above 24,200 and reached a high at 24,449, before pulling back towards 24,310.

Shortly after (about 18 minutes) the spike, a Treasury Official denied that any China tariff recommendations were made.

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Ed Moya

Ed Moya

Senior Market Analyst at OANDA
With more than 20 years’ trading experience, Ed Moya is a market analyst with OANDA, producing up-to-the-minute fundamental analysis of geo-political events and monetary policies in the US, Europe, the Middle East and North Africa. Over the course of his career, he has worked with some of the world’s leading forex brokerages and research departments including Global Forex Trading, FX Solutions and Trading Advantage. Most recently he worked with TradeTheNews.com, where he provided market analysis on economic data and corporate news. Based in New York, Ed is a regular guest on several major financial television networks including BNN, CNBC, Fox Business, and Bloomberg. He is often quoted in leading print and online publications such as the Wall Street Journal and the Washington Post. He holds a BA in Economics from Rutgers University. Follow Ed on Twitter @edjmoya ‏
Ed Moya