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US President Trump is expected to sign a bill approved by the US House of Representatives earlier on Wednesday that could force Chinese companies to delist from US stock exchanges if they fail to adhere to US auditing standards.

The bill will give Chinese companies such as Alibaba three years to comply with US rules before being removed from US markets.

Greater scrutiny could also deter other Chinese firms from listing in the United States, said some industry participants.

Market Implications

Expect a tit-for-tat response from China, whose foreign ministry spokesperson has already described the bill as a discriminatory policy that politically oppresses Chinese firms.

The Dollar Index is currently trading at lows since April 2018 just above 91.00, but in the past the theme of US/China trade wars has been a USD positive. Meanwhile, AUD/USD recently rallied to fresh year-to-date highs in the upper 0.7410s. AUD is perhaps the most vulnerable G10 currency to worsening US/China ties given its dependence on China as an export market, thus this news could weigh on the pair.