It seems that China’s economy is getting back on track. Such a conclusion can be drawn after the evaluation of today’s report on the Caixin China Manufacturing PMI. This report moderated investors’ fears about the slowdown of China’s economy due to the trade war. According to the statistics, the manufacturing sector in China unexpectedly rose in November to 51.8 points, recording its highest level in a year and a half. An index reading above 50.0 hints at optimism among the manufacturers who have experienced a difficult period in the last few months because of the trade war between Beijing and Washington and the decline of the Chinese economy. Meanwhile, Former China’s Deputy Minister of Trade said that the countries “are close to concluding an interim agreement” which would stipulate the cancellation of the imposition of the tariffs on Chinese goods. Notably, the deadline for the introduction of new tariffs is approaching. Previously, it was postponed until December 15. The US dollar index continues to trade near the level of 98.30 where the quote has been consolidating for the last week. Investors doubt the progress of trade negotiations, especially after Donald Trump has signed the Human Rights and Democracy Act. In response, Beijing imposed sanctions against US-based pro-democracy and human rights groups – Human Rights Watch that supports the protesters in Hong Kong. What is more, China will no longer review
the requests by the American warships to dock in Hong Kong. Market participants have already factored in upbeat economic data from China. Amid that, the US dollar, as a risky asset, rose against the yen to 109.70. However, later, the quote reversed. It may return to its previous level of 109.40. So, the greenback is likely to remain under the bears’ control. The Australian currency also started the weekly session with a rise to 0.6785. Nevertheless, it has all chances to decrease amid the probable escalation of the US-China trade conflict and tomorrow’s Reserve Bank of Australia meeting. Some economists assume that the RBA may hint at another key rate cut next year. For now, traders are awaiting US jobs report which is due on Friday. The figure will show whether the Fed will continue to lower the interest rate. Investors remain optimistic about this report which is bullish for the US dollar.