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

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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

Contributing Author at OANDA
With more than 20 years’ trading experience, Ed Moya was a Senior Market Analyst with OANDA for the Americas from November 2018 to November 2023. His particular expertise lies across a wide range of asset classes including FX, commodities, fixed income, stocks and cryptocurrencies. Over the course of his career, Ed has worked with some of the leading forex brokerages, research teams and news departments on Wall Street including Global Forex Trading, FX Solutions and Trading Advantage. Prior to OANDA 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 CNBC, Bloomberg TV, Yahoo! Finance Live, Fox Business, cheddar news, and CoinDesk TV. His views are trusted by the world’s most respected global newswires including Reuters, Bloomberg and the Associated Press, and he is regularly quoted in leading publications such as MSN, MarketWatch, Forbes, Seeking Alpha, The New York Times and The Wall Street Journal. Ed holds a BA in Economics from Rutgers University.
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