Trump Criticises China Once Again

Tensions between the US and China have ratcheted higher again this week as the two leading economies clashed at the UN General Assembly. During his speech, president Trump lashed out at China calling on the nation to be held “accountable” for its role in the pandemic. Trump was direct in his criticism of China, echoing his message over recent months saying: In the earliest days of the virus China locked down travel domestically, while allowing flights to leave China and infect the world. China condemned my travel ban on their country, even as they cancelled domestic flights and locked citizens in their homes."

Trump’s comments come at a time where the US administration’s handling of the virus is coming under increasing scrutiny. With the US death toll rising above the 200,000 mark and with many local lockdown measures still in place, the path of the pandemic in the US is still very much developing. Trump has been accused by critics of attempting to divert attention away from his own failings by criticising China.

Ongoing Tensions

Tensions between the US and China have been intensifying for most of the year now. Away from the public dispute over the COVID-19 pandemic, the two nations have also clashed over the Chinese National Security Law in Hong Kong, the ongoing Chinese militarisation of the South China Sea and the operation of Chinese 5G networks in the US.

China Responds

In President Xi’s speech, the Chinese leader sought to offer reassurance saying china has “no intention to enter a cold war with any country” but did warn of the risks of a “clash of civilisations.” In a comment more directed at the US, Xi went on to say: "no country has the right to dominate global affairs, control the destiny of others, or keep advantages in development all to itself.”

While Xi’s comments were more restrained, the Chinese Foreign Ministry has since responded to Trump’s comments. Foreign ministry spokesman Wang Wenbin accused trump of using “disregarded facts and fabricated lies” and said that Trump’s criticism was fuelled by “shady political motives”.

US Elections In Focus

With Trump facing re-election in just 40 days and with his approval ratings having crashed over the course of the pandemic and the handling of the Black Lives Matter protests, his targeting of china has been flagged as a purely political stance. With his ratings still well of the levels seen during his first election campaign, it is a method which appears to be having limited effect so far.

Technical views

USDCNH

Following the breakdown below the rising trend line from 2019 lows, USDCNH has broken through several key level. However, the test of 6.7510 found strong support and price is now retesting the 6.8470 level, which is holding as resistance for now. While below here, the move is still corrective and the long-term view remains bearish. If price can recover the level, however, the next upside level to watch will be the 6.9065 region.

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