Investing.com - The Japanese yen edged up on Monday as China cancelled its planned trade talks with the U.S. The dollar also gained following the news.
Citing people familiar with the situation, the Wall Street Journal reported on the weekend that Beijing is unlikely to resume talks with Washington until after November’s mid-term elections.
A proposed visit to Washington by vice premier Liu He originally scheduled for this week is also cancelled, according to the WSJ.
“It would be ‘asking for an insult,’ if China went ahead with trade talks after the US announced new tariffs and sanctions,” Shi Yinhong, a professor of international relations at Renmin University of China, said Saturday. “In the long run, there will be talks, because the trade war won’t last for thousands of years.”
Meanwhile, the U.S. tariffs on $200 billion worth of Chinese goods and retaliatory tariffs by Beijing on $60 billion worth of U.S. products are set to kick in today.
The USD/JPY pair was down 0.01% to 112.56 by 11:50PM ET (03:50 GMT). The U.S. dollar index, which tracks the greenback against a basket of currencies, was up 0.06% to 93.84.
The Australian dollar traded 0.34% lower to 0.7269 against the dollar after the news.
"The trouble is that further escalation is still on the cards as both sides are still well apart on the key issues," said AMP Chief Economist Shane Oliver.
"Trump remains defiant saying 'it's time to take a stand on China' and his threat to increase tariffs on all imports from China remains," Oliver added.
The dollar was under pressure late last week as investors believed that the U.S. Federal Reserve is likely to hike interest rates for the third time this year, with analysts expecting another one in December.
Elsewhere, the USD/CNY pair slid 0.16% to 6.8478. There will be no mid-rate from the People's Bank of China today as the Chinese markets are closed for a holiday.