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Magnifying the uncertainty surrounding the phase one deal between the United States (US) and China, CNBC’s Kayla Tausche recently conveyed messages from four people close to the talks. The overall tone seems to keep the risk of the additional US tariffs on Chinese goods.

Key quotes

I’ve been able to talk to four people close to the talks who suggest the deal is in trouble because there is not an agreement between the US and China — even at the stage — on which tariffs would go and which tariffs would stay. That there had been a proposal by China that any sort of tit-for-tat would need to be proportional, so anything the US removed China would remove, but the US wants to China to remove more tariffs than the US is willing to remove on US goods, and therein lies the problem.

Although one of these people close to talks suggests that the tariffs scheduled for December 15 are on track still to be shelved; that there’s still enough belief within the White House and the Presidents team that those should be averted at all costs. Of course the hardest part in this process has been selling the President on that argument.

FX implications

The news keeps the risk tone heavier with the S&P 500 Futures losing 0.30% by the press time of early Thursday morning in Asia. Also, the trade-exposed currencies, mainly the AUD/USD pair, witnessed additional weakness while taking rounds to 0.6800 at the time of writing.