The trade relationship prospect between America and China deteriorate. That was happened after the high ldiplomatic talk which wad done in Anchorage, Alaska. That discussion indicated that the Biden government doesn’t have a plan to leave the Trump’s attitude.
It is actually the Trump's tough stance on China. The level one agreement has made Washington and Beijing conduct the ceasefire in their trade competition. The representation of both parties are still concerning about the economic competition right now.
The American Minister of Foreign Affair, Antony Blinken, noted that the USA will highlight the issues related to China. They will do it deeply included the problems happened in Hong Kong, Xinjiang, cyberattack to America, and economic coercion to their allies.
China’s Response to Blinken Allegation
The Blinken allegation was directly replied by Yang Jiechi as the Director of the foreign affairs commission of the Communist Party of China. He said that his party is strictly opposed to American intervention related in China internal affairs. He stated one more thing.
Furthermore, he thought that America uses its financial hegemony and the military power to run the long sleeve jurisdiction. They also push the other countries to attack China. The meeting held in two days between the USA and China in Alaska was seen as a diplomatic training.
That talk was more like a dispute overview which. It is not too different from the trade war, especially in the Trump era. Clete Willems who was a Trump’s trade team before. He said that the meeting in that time was like a chance to share the official complaints from the country.
That was not a recovery effort to fix the economic relationship between China and America. He has low expectation for that meeting. He predicted that the China government will read the situation on the Biden team. They thought that the team will cancel the Trump’s action.
The US Dollar Index is Stronger
When this news was released, the index of Dollar of DXY was sold around 92.04. That was 0.14 percent stronger from the daily open price. The dollar increase was so significant because the tension prospect between China and America can trigger the risk-off sentiment.
That sentiment is good for the Greenback position as the safe haven. Furthermore, the obligation yield of America is still supporting the Dollar bullish right now. Meanwhile, Euro tried to break its decline versus USD around 1,900 in yesterday sales period.
Euro was still burdened by the worse economic outlook because the vaccination program which is not smooth in Europe. However, the EUR/USD was profited by the successful leadership of the Central Bank of the Republic of Turkey, or it is also known as CBRT.
The Crisis Happened in Turkey
At the end of the week, Recep Tayyip Erdoğan as the President of Turkey fired the Naci Agbal from its position as the CBRT governor. That decision placed Turkey in a market’s attention again. Naci Agbal has made a huge contributing in rehabilitating the monetary policy.
He also had an important role to recover the economy from the high inflation increase and the declined of Lira. Under his leadership, CBRT was successful to push USD/TRY and EUR/TRY to decrease by almost 20 percent. However, last week Agbal increased the interest rate.
The increase was from 17% to become 19%. That was allegedly done without the agreement from Erdoğan. The increase of that interest rate is probably the reason why he was fired. Sahap Kavcioglu was pointed to replace Agbal as the new CBRT Governor.
He was the ex-parliament member and has been written many criticisms about the monetary policy made by Agbal. The new appointment of Kavcioglu got the sympathy from the market participants. They doubt they Kavcioglu will be on his position for a long time.
