Aussie rises after Trump delays China tariffs; yuan at 7-month high

[TOKYO] The risk-sensitive Australian dollar rose and the yen sagged in early Asian trade on Monday after US President Donald Trump said he will delay increasing tariffs on Chinese goods on March 1, citing "substantial progress" in trade talks.

The Australian dollar gained 0.4 per cent to US$0.7157, reacting to Mr Trump's latest posts on Twitter.

The offshore yuan strengthened 0.3 per cent to 6.6806 yuan against the US dollar, its highest level since mid-July, also on the news he will not raise tariffs on US$200 billion of Chinese imports to 25 per cent from 10 per cent.

The Japanese yen eased 0.1 per cent to 110.75 yen to the US dollar, while the euro gained 0.1 per cent to US$1.1346.

The US dollar index against a basket of six major currencies barely moved and was at 96.446.

The US president also said he would plan a summit meeting with Chinese President Xi Jinping at his Mar-a-Lago estate in Florida to conclude an agreement, assuming the trade talks make additional progress.

Mr Trump's delay of higher tariffs "didn't come as a total surprise," said Shinichiro Kadota, senior forex and rates strategist at Barclays in Tokyo. "So I expect the market reaction should be somewhat limited and that the focus would shift back to global economic fundamentals."

Indeed, Mr Trump's tweets came amid rising expectations that he would delay increasing higher tariffs before the March 1 deadline to avoid escalating the US-China trade war.

The president said in a tweet that progress had been made on a host of divisive areas including intellectual property protection, technology transfers, agriculture, services and currency.

Elsewhere, the New Zealand dollar rose 0.5 per cent to US$0.6875, also helped by local retail sales jumped in the fourth quarter, tempering concerns of softer growth in the country's economy.

The British pound was idling at US$1.3067 as markets awaited some clarity on where Brexit talks were heading.

Prime Minister Theresa May put off a vote on her Brexit deal until as late as March 12 - just 17 days before Britain is due to leave the EU - setting up a showdown this week with lawmakers who accuse her of running out the clock.

The Telegraph reported that Mrs May was considering whether to delay Britain's exit for up to two months.

REUTERS