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Original title: The United States announced restrictions on the activities of Chinese diplomats. Eurobank raised the alarm. Is the “Monetary Cold War” about to begin?
FX168 Financial News (North America) News from the US Department of State on Wednesday (September 2), announcing that it will impose restrictions on the work activities of Chinese diplomats stationed in the United States, including the need for Senior Chinese diplomats in the United States visit American universities and meet with local officials. With US approval, the Chinese embassy to the US conducting cultural activities with more than 50 people outside the venue must be approved by the US.
The United States has recently stated that it will require high-level Chinese diplomats to obtain approval from the US State Department before visiting American university campuses and holding cultural events with more than 50 people outside of the embassy or consulate.
The United States said the move was a response to China’s restrictions on US diplomats in China. This is part of the Trump administration’s crackdown on so-called Chinese influence operations and espionage activities.
The US State Department said it will also take steps to ensure that all social media accounts at Chinese embassies and consulates are “correctly identified.”
“We are only asking for reciprocity. The authority of our diplomats in China must reflect the authority of Chinese diplomats in the United States, and today’s steps will allow us to move in this direction to a great extent.”
This is the latest measure by the United States to restrict China’s activities in the United States before the presidential elections in November. In the US elections, President Trump will take a tough stance on China as a major foreign policy platform.
Pompeo also said that Keith Krach, the US State Department undersecretary for economic growth, recently wrote to the board of directors of American universities to remind them of the threat posed by the Chinese Communist Party.
Pompeo said: “These threats can come in the form of illegal research funding, theft of intellectual property rights, intimidation of foreign students and opaque talent hiring.”
He said universities can ensure their investment and endowment funds are clean, “by taking some key steps to disclose all (Chinese) companies’ investments in endowment funds, especially investments in emerging market index funds.”
Pompeo said Tuesday that he expects the Chinese Confucius Institute Cultural Center on American university campuses to be closed before the end of this year. He accused these cultural centers of recruiting “spies and collaborators.”
Last month, Pompeo called the Confucius Center, which runs dozens of Confucius Institutes in the United States, “an entity that promotes global propaganda and malicious influence from Beijing” and required it to register as a foreign mission.
The US State Department announced in June that it would begin treating China’s four major media organizations as foreign embassies, calling them spokesmen for Beijing.
In February this year, the US State Department took the same action against five other Chinese media. In March this year, the US State Department declared that it would reduce the number of journalists authorized to work in the US offices of major Chinese media outlets from 160 to 100 due to “long-term intimidation and harassment of journalists from Beijing. “
In response to the Sino-Indian conflict, Pompeo said Wednesday that the United States hopes to peacefully resolve the conflict between India and China on the disputed Himalayan border.
Pompeo also stated at the State Department press conference that Washington called on China to hold talks with the Dalai Lama, the spiritual leader of Tibetan Buddhism.
The European Central Bank ringsEURA wake-up call for appreciation, the euro fell, the dollar rose and the “currency cold war” flared up again?
On Wednesday, the euro was still under pressure. The day before, the euro rose strongly and the euro / dollar briefly broke the 1.20 mark for the first time since May 2018, but was quickly replaced by a sell-off.
The chief economist of the European Central Bank, Lien, said that the exchange rate is “really important” in monetary policy.
On Wednesday, the euro / dollar fell sharply, hitting a low of 1.1821.
(EUR / USD 30 minute chart, source: FX168)
Intercontinental Exchange (ICE), which measures the dollar against a basket of six major currenciesDollar indexIt fell to a low in more than two years on Tuesday and then rebounded when the euro plunged. The index is now up 0.45% to 92.75, the highest increase of 92.88 on the day.
(USD 30 minute chart, source: FX168)
After eurozone inflation fell to its lowest level since the first quarter of 2016, Lien’s remarks were deemed that the euro’s rise exceeded central bank expectations. The appreciation of the currency will curb inflation, lower the price of imported goods and cause a tightening of the financial environment.
Normally, ECB officials are reluctant to talk too much about the exchange rate, but say the exchange rate is one of a number of factors they consider when assessing conditions and formulating policies.
Arkera’s global macro and currency strategist Viraj Patel said in a report Wednesday that “ September has just started and comments from G10 central bank officials on currencies have begun. ” Patel warned last month that the euro’s uptrend was close to that of the European Central Bank. The “pain threshold” is increasingly likely to provoke resistance from policy makers.
This is part of a broader rally that can occur in the face of a falling dollar. The dollar has fallen sharply from the highs caused by the March pandemic. While the dollar’s decline is seen as boosting overall global economic growth, especially in emerging markets, it also threatens the continuation of what Patel calls the “currency cold war.” Since the global financial crisis, the “monetary cold war” has broken out many times.
It constructed an index of aversion to the exchange rate force in August, ranking G10 countries according to their ability to withstand the macroeconomic costs caused by a strong national currency, and foundSwiss francAnd the euro faces the biggest risk, the risk they face is that the authorities push the currency down even further.
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