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The Wall Street Journal has reported this weekend that the US is sending two aircraft carriers into one of Asia’s hottest spots to deliver a pointed message to China that it doesn’t appreciate Beijing’s military ramp-up in the region.

The USS Ronald Reagan and USS Nimitz are set to hold some of the US Navy’s largest exercises in recent years in the South China Sea from Saturday—at the same time that China is holding drills in the area.

“The purpose is to show an unambiguous signal to our partners and allies that we are committed to regional security and stability,” Rear Admiral George M Wikoff was quoted as saying by the Wall Street Journal, which first reported the exercises.

Market implications

This is just another headline in a long laundry list of antagonistic tactics from either wise, stoking the flames surrounding strained relations over everything from coronavirus to trade to Hong Kong – risk-off is the playbook over such themes and AUD/USD trades as a proxy to such news. 

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