• Partial U.S. China deal outlined
• GBP surges on Brexit hopes
Hopes for a reprieve to grinding trade wars have gained ground Friday, following positive news of a mini-deal between the US and China and intensified and ‘constructive’ Brexit talks, which sent the pound higher.
Liu He, China’s vice premier met with U.S. Treasury secretary Steven Mnuchin on Friday and outlined a partial agreement that could pave the way for a broader deal before the year end.
“There’s a floor deal for delaying the October 15 tariff increase and the December 15 hike is being actively discussed,” Derek Scissors, a China expert at the American Enterprise Institute, said.
It is believed that China will agree to some agricultural concessions while the U.S. would provide some tariff relief under the terms of the tentative agreement.
U.S. stock posted gains Friday, with the Dow Jones Industrial Average was up close to 430 points as President Trump prepared to meet with Chinese Vice Premier Liu He at the White House.
“Not only would it be of tangible benefit by breaking the impasse, but it would also create badly needed breathing space for both sides to reflect on the bigger picture,” Chinese state newspaper China Daily reported.
Brexit talks spurs jump in GBP
In Europe, the trade outlook likewise picked up this week as promise of a cooperation on Brexit improved. UK Prime Minister Boris Johnson spoke with Irish leader Leo Varadkar who said he was “now absolutely convinced” that the UK wants a Brexit deal and believes it is “possible” by 31 October deadline.
“I had a very good meeting today with the prime minister and our teams together – very positive and very promising… I am now absolutely convinced that both Ireland and Britain want there to be an agreement, that’s in the interests of Ireland, the UK and EU as a whole,” Varadkar said.
“And I do see a pathway towards an agreement in the coming weeks.”
The pound jumped to a three-month high amid investor optimism about a Brexit deal before November. GBP rose 1.9% to $1.26, and against the euro was up 1.67% at €1.1489.
The currency has rallied more than 3% since Thursday, its biggest two-day gain since before the June 2016 referendum on leaving the EU.