In the Asian session on Wednesday, the DOLLAR index was up, now at around 94.15. Spot gold continued to come under pressure, having just slipped below $1,900 an ounce again. The dollar surged on Tuesday in response to comments from Fed officials, sending gold prices tumbling again. The session will feature several top Fed officials, including Federal Reserve Chairman Colin Powell and Chicago Fed President Charles Evans, whose comments spurred Tuesday’s dollar rally, so Wednesday’s remarks will also be watched. On the china-India front, the sixth round of military-ministerial talks between the Chinese and Indian militaries ended with the two sides agreeing to stop adding troops to the frontline, sending an important signal of easing tensions along the China-India border and sending some safe-haven bids for gold.
The dollar rose sharply on Tuesday after Chicago Federal Reserve Chairman Charles Evans said hawkish comments that further QE policy might not provide an additional boost to the U.S. economy.
Chicago Fed President Charles Evans said on Tuesday that without another package of fiscal support, the U.S. economy risked a longer, slower recovery or even an outright recession. Mr Evans also said he did not believe open-ended quantitative easing was an important part of the solution.
Mr Evans is not a voting member of the Federal Open Market Committee this year, but he will be in 2021. Mr Evans is generally regarded as a dovish official.
Erik Nelson, macro strategist at Wells Fargo Securities, said: “All we’ve heard from the Fed over the past few months is that we’re not going to raise rates for the foreseeable future. Then Evans came in and challenged that, so the market was caught off guard.”
“Evans’ comments are very hawkish,” said Edward Moya, senior market analyst at OANDA in New York. He mentioned a pause in quantitative easing and interest rate increases until the inflation target was reached. That took the market by surprise. “The sooner we get to the other end of the virus, the sooner we will see expectations of rate hikes rise, which should further fuel the dollar rally.”
The dollar index.DXY extended gains in Asian trading on Wednesday, hitting an eight-week high of 94.20.
The Times of India reported that sources said the PEOPLE’s Liberation Army (PLA) had been told “to take the first step” as it had invaded Indian territory in several locations in early May, resulting in a stand-off and military build-up between the two sides.
Rajnath Singh, India’s defence minister, said on Thursday that the confrontation with China’s People’s Liberation Army had been caused by “interruptions in patrols”. Mr. Singh promised parliament that Indian troops would not retreat, and Indian border troops are now ready for long-term deployment in the border areas. “There is no force on earth that can stop Indian troops from patrolling the border areas,” Singh said, revealing that the army was seeking to resume all previous patrol points and return the LINE of Actual Control (LAC) to its April status.
New Delhi: The Indian military has accused the Chinese military of carrying out “provocative military activities” on the south bank of Bangong Lake from the night of August 29 to the early morning of August 30. On the evening of 29 and 30 August 2020, the People’s Liberation Army (PLA) took provocative military actions to change the status quo in violation of the consensus reached through military and diplomatic contacts during the previous standoff in eastern Ladakh, the Indian military said in a statement on 31 August.
Indian government sources confirmed on September 7 that Chinese and Indian troops opened fire during a confrontation near the Line of Actual Control (LAC) on September 7, the first time shots have been fired at the border between the two countries in decades. “India is committed to disengagement and de-escalation of the situation on the LINE of Actual Control, while China continues to take provocative actions to escalate the situation,” the Indian military said in a statement on September 8.
The Chinese Foreign Ministry has said on many occasions that China is not responsible for the recent border situation between China and India. It is the Indian side that comes first in violating bilateral agreements and agreements and important consensus, in illegally crossing the border line to provoke, in unilaterally changing the status quo of the border area, and in firing guns to threaten the safety of the Chinese border troops.
On September 8, Chinese Foreign Ministry Spokesperson Zhao Lijian held a regular press conference. Zhao lijian said that during the incident, the Indian side first fired threatening shots at Chinese border patrol personnel, which was the first time that the calm of the border between the two countries was interrupted by gunfire since 1975. China has repeatedly stressed that the two sides should resolve their differences through peaceful means and consultation and dialogue. Confrontation is not in the interests of either side.
According to the website of the Embassy of the People’s Republic of China in India on September 14, Ambassador Sun Weidong made remarks on recent media inquiries and bilateral meetings between Chinese and Indian foreign ministers. Referring to the consensus reached in previous meetings between the two leaders, Sun Weidong said the two sides should “pursue win-win cooperation” rather than a “zero-sum game”.