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China warns US not to escalate tense situation

In the midst of climbing geopolitical tensions between the US and China over the Chinese balloon raids, a Chinese official warned the United States not to escalate the tense situation.

This comes after US President Joe Biden’s administration praised the Pentagon for shooting down a suspected Chinese spy balloon off the US Atlantic coast on Saturday.

In response, China angrily expressed “strong dissatisfaction” with the move, saying it could provide “necessary answers.”

Market reaction

The forex market has not been affected by the US-China conflict, but Chinese equities are down 1-2% year to date. US S&P500 Index futures are down 0.35% on the day.

The AUD/USD pair regains ground above 0.6900, up 0.05% on the day.

Source: Fx Street

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