Currencies linked with greater investor risk appetite, such as the Australian dollar, jumped on Wednesday after Bloomberg reported China remained open to signing a partial trade deal with the United States despite being put on the tech blacklist.

The <a href="https://www.wionews.com/world/us-expands-blacklist-to-include-chinas-top-ai-startups-ahead-of-trade-talks-254672">US&nbsp;government has widened its trade blacklist </a>to include some of China's top artificial intelligence start-ups, punishing Beijing for its treatment of mostly Muslim minorities and ratcheting up tensions ahead of high-level trade talks in Washington this week.

The Australian dollar, a global risk barometer, was last up 0.3 per cent&nbsp;at $0.6744 and the New Zealand dollar rose 0.4 per cent&nbsp;to $0.6319.

China's yuan was up 0.5 per cent&nbsp;at 7.1308 against the dollar in offshore trading.

The euro was up 0.3 per cent&nbsp;at $1.09785. The index that tracks the dollar against a basket of six other currencies was down 0.1 per cent&nbsp;at 99.007.

"Risk is looking reasonably better, but anyone who is trading the trade war knows that the impact of good news will be fading," said Jeremy Stretch, head of G10 FX strategy at CIBC Capital Markets.

"I think it pays off to be sceptical in terms of expectations of something exceptional happening during the<a href="https://www.wionews.com/world/us-china-trade-talks-to-resume-thursday-white-house-254346"> US-China trade talks this week,"</a> Stretch said.

The biggest move in the foreign exchange market, however, was an early morning plunge in the Swedish crown, both against the euro and the dollar, on concerns the <a href="https://www.wionews.com/world/persecution-of-the-uyghurs-us-blacklists-28-chinese-companies-over-uighur-abuses-in-xinjiang-254355">US-China conflict over trade and foreign policy </a>was nowhere near a resolution and was increasingly damaging the global economy.

Sweden's open economy makes the crown vulnerable to global growth dynamics and therefore to the trade dispute between the world's two biggest economies, which has hurt growth in the two years since US&nbsp;President Donald Trump ignited the trade war.

The Swedish crown was last steady, after falling earlier to a 10-year low of 10.9230 against the euro and a 17-year low of 9.9639 against the dollar.

"It's a remarkable move," said Stephen Gallo, European head of FX strategy at BMO Capital Markets. "You cannot get a clearer trend here. The fall reflects deepening worsening global outlook."

Gallo expects the crown to fall to 11 against the common currency, close to levels not seen since the financial crisis. Sweden's competitiveness as an exporter led to the crown's decline, he said.

The euro was a sell against the dollar, though, since it was likely to maintain its status as a safe-haven currency and US&nbsp;investors were likely to keep their dollars at home, he added.

Chinese Vice Premier Liu He is due to arrive this week in Washington for trade talks. He is expected to meet US&nbsp;Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Thursday.

Currencies linked with greater investor risk appetite, such as the Australian dollar, jumped on Wednesday after Bloomberg reported China remained open to signing a partial trade deal with the United States despite being put on the tech blacklist.

Currencies linked with greater investor risk appetite, such as the Australian dollar, jumped on Wednesday after Bloomberg reported China remained open to signing a partial trade deal with the United States despite being put on the tech blacklist. The US government has widened its trade blacklist to include some of China's top artificial intelligence start-ups, punishing Beijing for its treatment of mostly Muslim minorities and ratcheting up tensions ahead of high-level trade talks in Washington this week. The Australian dollar, a global risk barometer, was last up 0.3 per cent at $0.6744 and the New Zealand dollar rose 0.4 per cent to $0.6319. China's yuan was up 0.5 per cent at 7.1308 against the dollar in offshore trading. The euro was up 0.3 per cent at $1.09785. The index that tracks the dollar against a basket of six other currencies was down 0.1 per cent at 99.007. "Risk is looking reasonably better, but anyone who is trading the trade war knows that the impact of good news will be fading," said Jeremy Stretch, head of G10 FX strategy at CIBC Capital Markets. "I think it pays off to be sceptical in terms of expectations of something exceptional happening during the US-China trade talks this week," Stretch said. The biggest move in the foreign exchange market, however, was an early morning plunge in the Swedish crown, both against the euro and the dollar, on concerns the US-China conflict over trade and foreign policy was nowhere near a resolution and was increasingly damaging the global economy. Sweden's open economy makes the crown vulnerable to global growth dynamics and therefore to the trade dispute between the world's two biggest economies, which has hurt growth in the two years since US President Donald Trump ignited the trade war. The Swedish crown was last steady, after falling earlier to a 10-year low of 10.9230 against the euro and a 17-year low of 9.9639 against the dollar. "It's a remarkable move," said Stephen Gallo, European head of FX strategy at BMO Capital Markets. "You cannot get a clearer trend here. The fall reflects deepening worsening global outlook." Gallo expects the crown to fall to 11 against the common currency, close to levels not seen since the financial crisis. Sweden's competitiveness as an exporter led to the crown's decline, he said. The euro was a sell against the dollar, though, since it was likely to maintain its status as a safe-haven currency and US investors were likely to keep their dollars at home, he added. Chinese Vice Premier Liu He is due to arrive this week in Washington for trade talks. He is expected to meet US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin on Thursday.

Australian dollar rises, euro up after China says open for partial trade deal

The International Monetary Fund (IMF) said Thursday it feared the consequences of a possible "contagion" of Italy's economic woes to European countries with "weaker macroeconomic fundamentals."

Noting the "four-year high" in Italian sovereign bond yields, the IMF said, "spillovers to other markets have been fairly contained."

"But there is appreciable uncertainty, and contagion from future stress could be notable, especially for economies with weaker macroeconomic fundamentals and limited policy buffers," the IMF said in its autumn forecast for Europe.

Italy is under massive pressure since the European Commission on October 23 rejected its 2019 budget in a historic move, giving the ruling populist coalition in Rome until November 13 to present changes.

Failing that, Brussels could put Italy into something called the "excess deficit procedure", a complicated process that could eventually lead to a fine of 0.2 per cent of the country's GDP.

The Italian government -- a coalition of the far-right League and the anti-establishment Five Star Movement -- plans to run a public deficit of 2.4 per cent of GDP, three times the target of its centre-left predecessor.

The coalition's 2019 budget is based on an estimate of annual growth of 1.5 per cent -- a figure considered optimistic by the IMF, which has forecast only one per cent, and the Commission, which expects 1.2 per cent.

Italian leaders insist the low growth rate is all the more reason to kickstart the economy through a spending spree, but Brussels fears the rising deficit could further feed Italy's exploding debt.

Italy already owes 2.3 trillion euros ($2.6 trillion), a sum equivalent to 131 per cent of its GDP. Even if Brussels fails to punish Rome, many assume the markets will.

Italy, as well as Turkey the IMF noted, "should prioritise measures that reduce fiscal deficits toward their medium-term targets and lower debt."

The International Monetary Fund (IMF) said Thursday it feared the consequences of a possible "contagion" of Italy's economic woes to European countries with "weaker macroeconomic fundamentals.

The International Monetary Fund (IMF) said Thursday it feared the consequences of a possible "contagion" of Italy's economic woes to European countries with "weaker macroeconomic fundamentals." Noting the "four-year high" in Italian sovereign bond yields, the IMF said, "spillovers to other markets have been fairly contained." "But there is appreciable uncertainty, and contagion from future stress could be notable, especially for economies with weaker macroeconomic fundamentals and limited policy buffers," the IMF said in its autumn forecast for Europe. Italy is under massive pressure since the European Commission on October 23 rejected its 2019 budget in a historic move, giving the ruling populist coalition in Rome until November 13 to present changes. Failing that, Brussels could put Italy into something called the "excess deficit procedure", a complicated process that could eventually lead to a fine of 0.2 per cent of the country's GDP. The Italian government -- a coalition of the far-right League and the anti-establishment Five Star Movement -- plans to run a public deficit of 2.4 per cent of GDP, three times the target of its centre-left predecessor. The coalition's 2019 budget is based on an estimate of annual growth of 1.5 per cent -- a figure considered optimistic by the IMF, which has forecast only one per cent, and the Commission, which expects 1.2 per cent. Italian leaders insist the low growth rate is all the more reason to kickstart the economy through a spending spree, but Brussels fears the rising deficit could further feed Italy's exploding debt. Italy already owes 2.3 trillion euros ($2.6 trillion), a sum equivalent to 131 per cent of its GDP. Even if Brussels fails to punish Rome, many assume the markets will. Italy, as well as Turkey the IMF noted, "should prioritise measures that reduce fiscal deficits toward their medium-term targets and lower debt."

IMF fears possible Italy 'contagion' to weaker European economies

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Australian dollar rises, euro up after China says open for partial trade deal

IMF fears possible Italy 'contagion' to weaker European economies