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EU-China trade tools seen as keeping escalation risk moderate

Analysts at Standard Chartered said the EU is likely to use new trade tools to back domestic industry while continuing negotiations with China.

Reported · Written up by our desk · Major Pairs

Standard Chartered analysts Christopher Graham and Carol Liao said the European Union is trying to rebalance its trade relationship with China without fully cutting off engagement, pointing to a large and rising EU-China trade deficit.

They said EU-China negotiations are ongoing and that the bloc is developing new trade tools, with the report stressing moderate escalation risk and a likely focus on supporting domestic industry.

The FXStreet brief also noted currency market moves alongside the policy theme, with GBP/USD falling below 1.3500 as the US dollar strengthened, while EUR/USD slipped toward daily lows near 1.1430.

Latest closeEUR/USD 1.147 ▲0.8%|GBP/USD 1.354 ▲1.4%

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