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In an official statement released on Monday, China’s Foreign Ministry said that the US consulate in the southwestern city of Chengdu has closed as of 10 a.m. (0200 GMT).

This comes after Beijing ordered Washington its consulate in Chengdu on Friday, retaliating to the latter’s order for the Chinese consulate closure in Houston amid accusations of the intellectual property (IP) theft.

Investors continue to fret that the recent US-China escalation could translate into trade, especially after US President Donald Trump has expressed his disinterest on the trade deal with China lately.

Market reaction

The risk sentiment remains tepid amid US-China tensions and the relentless rise in the coronavirus cases, with the record surge in the US undermining the recovery in the world’s largest economy.

Therefore, the US dollar continues to remain heavy while gold rallies to a new life-time high above $1930. AUD/USD tracks the gold rally and S&P 500 futures bounce to trade near 0.7140 levels.