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Donald Trump has been crossing the wires in early Asia and the latest comment arrived with him saying that the EU treats the US  worse than China.  

Additional comments from throughout the day:

  •  Labelling China as a currency manipulator is a ‘promise kept’.
  • If we take off China tariffs, we lose all the cards.
  • China wants to make a deal, Iran wants to make a deal – speaks at rally in New Hampshire.
  • Thinks US  will make a fantastic trade deal with Britain’s Johnson.
  • Trade deal with Britain is moving along rapidly.
  • Wants to see china humanely solve the problem in hong kong and thinks they could do it quickly.
  • China wants to follow through very quickly on us agricultural purchases.
  • Not there yet on china but we will see what happens.
  • Fed’s Powell should be cutting rates because countries around world are cutting and we want to stay even.
  • September china meeting still on as I understand it.
  • Officials from China, us talking by phone.
  • Does not think China would retaliate for increase in tariffs.
  • Would not want to see a violent crackdown by china in hong kong.
  • Thinks it would not be a bad idea for China’s xi to meet with hong kong protest leaders.
  • Having very good discussions with China.
  • Longer the trade war goes, stronger US  gets.
  • US consumers may have to pay something at some point to cover cost of tariffs on Chinese goods.
  • Thinks trade war with China will be fairly short.
  • China very much wants to make a deal.

FX implications:  

Global trade wars are a continued threat to world growth. The Dollar is the world’s reserve currency which holds its own at times of panic. The Yen and CHF and indeed the euro have been used as funding currencies, so if there is a fallout in EM-FX, these currencies come under demand also.