Currency Market: CNY Falls, GBP Rises on Deals

The USD/CNY currency pair gained 0.2% to 7.026 as the US and China announced their Phase One agreement. The growth slowed when the Chinese said it wanted more talks before agreeing to the deal.

The Phase One agreement includes a suspension of tariff increase and China’s promise to buy more American agricultural produce. The second-largest economy plans to hold more negotiations this month.

Economic analysts claim the promise is “worth nothing” until both countries finalized the full contract. The negotiating parties will finalize the agreement in four to five weeks.

The Chinese producer price index fell by 1.2% year-on-year as the steepest slump since July 2016. Their pork prices leaped 69.3% since last year. 

Brexit development boosted the GBP/US currency pair by 0.2% to 1.2629. The European Union claims the withdrawal will need “a lot of work” before they can approve it. 

Meanwhile, the USD/JPY pair lowered 0.1% to 108.32. 

British Parliament Talks Borders

The UK Prime Minister faces a hectic week before his emergency Parliament meeting on October 19. Skeptical EU officials bumped the GBP/USD exchange as chief negotiator Michel Barnier questions the UK’s plans for the Irish border.

PM Boris Johnson made a major concession over the Northern Ireland border last Thursday. He plans to keep the country in the UK customs territory without the need for border controls. 

At the revelation, EU claims there was a big gap over the custom agreements. Barnier raised concerns about the complexity of this Northern Ireland plan. 

Furthermore, the organization said the deal still needed a lot of work before they finalize it.

The Parliament will meet for its first emergency Saturday meeting after 37 years. The prime minister promises the MP’s Brexit approval by then.

The Benn Act demands Johnson to issue an extension, but he claims he would rather die than to do so. Despite this, Johnson said they could prepare to “leave without a deal.”

Currency investors look forward to a “people versus Parliament” election against the prime minister.