US Mulls Currency Accord With China in Partial Trade Deal

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Led by Chinese Vice Premier Liu He and USA trade representative Robert Lighthizer, the meetings have been a source of anxiety for investors. The Australian dollar strengthened overnight against the U.S. currency partially due to market speculation about a potential USA currency pact with China to stop devaluation.

The New York Times said Thursday that coercive measures under consideration included limiting Chinese companies' access to capital markets as well as exposing Chinese companies to greater criminal liability under USA law, heightened regulatory scrutiny and blocking some USA pension investments in China.

Under Trump, the USA has slapped tariffs on more than $360bn worth of Chinese imports and is planning to hit another $160bn 15 December.

The reports add that Chinese negotiators may leave the United States earlier than expected amid a lack of progress in the talks.

China is willing to bump up purchases of United States farm exports and make other concessions but will stop short of addressing Trump's core grievances, according to reports from Bloomberg and The Financial Times.

Top US and Chinese trade and economic officials were to meet in Washington on Thursday and Friday to try to end a 15-month-old trade war that is slowing the global economy and threatens to upend decades-old trade systems.

"Big day of negotiations with China", the president wrote on Twitter.

In return, Beijing would offer non-core concessions like purchases of agricultural products without giving in on major sticking points, the official said, without offering further details.

The conflicting updates on US-China trade can be seen whipsawing early movers with the likes of the ASX 200 and the Japan 225 joining US futures in red. "They want to make a deal, but do I?"

Just since Monday, Washington has slapped visa restrictions on senior Chinese officials and blacklisted more than two dozen Chinese firms, accusing them of persecuting ethnic Muslims in China's western Xinjiang region. Those include laws around intellectual property theft and the forced transfer of foreign technology.

But Clete Willems, a former Trump trade advisor, said Wednesday a partial deal could be the president's best move.

Markets over the prior 24 hours had pinned their hopes on media reports that Beijing will propose a partial trade deal to prevent further escalation.

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