Advertisement

Asian Shares Post Solid Weekly Gains Amid Trade Deal Signing, China GDP Growth

The major Asia Pacific stock indexes closed mostly higher last week. Surprisingly, stocks were lower in China. That move was unexpected since most of the stories dominating the news last week were positive economic developments involving the world’s second-largest economy. The rising yuan may have been behind the weakness.

Market sentiment in the region improved last week with the signing of the Phase one trade deal between the United States on January 15. Ahead of the inking of the deal, the U.S. on Monday removed China from its currency manipulator list.

Late in the week, markets in Asia rose after China announced its economy grew by 6.1% in 2019, meeting expectations even amid a trade dispute with the U.S. Following the release of the GDP data, the Chinese yuan, which has been appreciating amid trade optimism, strengthened further.

To round-out the week, Japan and South Korean shares jumped to 15-month highs, while the benchmark Australian index reached an all-time high, piercing the 7000-point level in the process.

Last week, Japan’s Nikkei 225 Index settled at 24041.26, up 190.69 or +0.80%. South Korea’s KOSPI Index finished at 2250.57, up 44.18 or +2.00% and Hong Kong’s Hang Seng Index closed at 29056.42, up 418.22 or +1.46%.

China’s Shanghai Index settled at 3075.50, down 16.79 or -0.54%. Australia’s S&P/ASX 200 Index finished the week at 7064.10, up 135.10 or +1.95%.

US Removes China from Currency Manipulator List Ahead of Trade Deal Signing

The United States removed China from a list of countries considered currency manipulators just two days before top trade negotiators for Washington and Beijing signed a key “Phase One” trade deal, the Treasury Department announced on January 13.

The decision to strike China from the currency manipulator list comes more than five months after the Treasury Department formally made the designation. China is now on a “monitoring list” for currency practices along with nine other countries, including Germany, Italy and Japan.

“The Treasury Department has helped secure a significant Phase One agreement with China that will lead to greater economic growth and opportunity for American workers and businesses,” Treasury Secretary Steven Mnuchin said in a statement. “China has made enforceable commitments to refrain from competitive devaluation, while promoting transparency and accountability.”

Trump signs ‘Phase One’ Trade Deal with China in Push to Stop Economic Conflict

President Trump signed a “phase one” trade agreement with China as the world’s two biggest economies try to rein in a more that 18-month trade war.

The deal includes provisions to root out intellectual property theft and forced technology transfers and increase Chinese purchases of U.S. goods, though it leaves open questions about enforcement.

The Trump administration aims to start negotiating the next piece of the trade agreement before the November 2020 election.

China Said Its Economy Grew 6.1% in 2019, In Line with Expectations

China said Friday its economy grew by 6.1% in 2019, meeting expectations even amid a trade dispute with the United States. Analysts polled by Reuters had expected China’s economy to have grown 6.1% in 2019, compared with 6.6% in 2018. Still, China’s GDP growth last year was the slowest since 1990, according to Reuters records.

This article was originally posted on FX Empire

More From FXEMPIRE: