Asian shares came under renewed pressure on Friday as a report U.S. President Donald Trump was preparing to step up a trade war with Beijing sent Chinese stocks lower and partially erased gains made in this week’s global rally. NAFTA negotiators from Canada and the United States wrapped up a third day of two-way talks, agreeing to meet the next day to resolve final differences before a deadline, with Mexican counterparts on standby to re-join negotiations. Despite some contentious issues still on the table, the increasingly positive tone contrasted with U.S. President Donald Trump’s harsh criticism of Canada in recent weeks, raising hopes the year-long talks to revamp the North American Free Trade Agreement (NAFTA) will conclude soon with a trilateral deal. Negotiations entered a crucial phase this week after the United States and Mexico announced a two-way deal on Monday, setting auto content rules and paving the way for Canada to rejoin talks to modernize the 1994 accord that underpins annual trade of more than $1 trillion.
In currencies GBPUSD rose to 1.3089 as fears of a ‘hard Brexit’ eased after the European Union’s chief exit negotiator signalled an accommodative stance towards London in ongoing talks. EURUSD was a shade lower at $1.1699 after edging up 0.1 percent the previous day.
In commodity markets, Traders expect a drop of crude supply in November when the U.S. sanctions against Iran will take effect. Iran produced around 3.65 million barrels per day of crude in July, making it the third biggest producer within the OPEC, behind Saudi Arabia and Iraq Oil prices gained after trading lower overnight amid concerns of intensifying trade war between China and the U.S. Brent Oil Futures gained 0.04% to $78.05 on track to record a 4% rise in August, while Crude Oil WTI Futures also rose 0.09% to $70.31 and is set to record a 2% gain for the month.
Gold prices gained as reports that U.S. President Donald Trump was considering plans to impose tariffs on $200 billion in Chinese imports as soon as next week weighed on market sentiment. Gold prices have declined about 7.7% so far this year amid geopolitical events including global trade concerns and the recent Turkish lira crisis, with investors preferring the dollar as a safe-haven.