The Chinese yuan is trading bullish against the US dollar over increasing optimism in global financial markets for a possible resolution in the US-China trade war happening soon. At the time of writing, USD/CNH is trading at around , sliding below the key level of 7.00 for the first time in several months.

According to a report on Reuters, sources have revealed that the US and China are getting close to reaching their phase one trade deal after the US agreed in principle to put off the latest tariff hikes which were set to roll out on December 15. In addition, the US is also likely to cut existing tariffs on Chinese imports by up to 50% in exchange for China agreeing to increase farm purchases from the US next year.

Even as markets wait for either side to make an official announcement regarding this latest development, the rumors have served to lift the mood in the markets and bring back a risk-on sentiment. Global equities have also risen to trade at record highs while safe havens like gold are losing their sheen for now.