Conflict Over Taiwan Would Trigger A Huge Global economic Shock

US President Joe Biden hopes to limit deterioration of ties with China when he meets its leader Xi Jinping next week, but will be honest about U.S. concerns, including over Taiwan and human rights, a senior administration official said on Thursday, reported Reuters.

On the other hand, UK Today mentioned that the US has warned European countries that a conflict over Taiwan would trigger a huge global economic shock, in an effort to step up contingency planning amid rising concern about military action in the Indo-Pacific. “The US has warned European countries that a conflict over Taiwan would trigger a huge global economic shock, in an effort to step up contingency planning amid rising concern about military action in the Indo-Pacific,” adds the news.

The stakes are high as the White House conveyed that US President Biden will hold talks on Monday with Xi on the sidelines of a Group of 20 Nations (G20) summit in Indonesia, their first face-to-face meeting since Biden became President in January 2021.

Reuters also quotes a senior administration official from the US saying that there would be no joint statement from a meeting at which there are no expectations for specific agreements. “White House national security adviser Jake Sullivan told reporters later that the administration would brief Taiwan on the results of Biden's meeting with Xi, aiming to make Taipei feel "secure and comfortable" about U.S. support,” per the news.

AUDUSD remains mildly offered

The news challenges AUDUSD buyers, as well as the market’s risk-on mood, amid a sluggish Friday. That said, the Aussie pair was last seen picking up bids to 0.6620, down 0.15% intraday.

Also read: AUDUSD grinds near 0.6630 as China’s covid woes jostle with US inflation-led optimism