Representatives of U.S. Treasury Secretary Steven Mnuchin and Chinese Vice Premier Liu He are in private talks to resume negotiations on trade matters in a bid to avoid a trade war, Bloomberg News reported, citing two sources. Mnuchin had told CNBC last week that “quiet conversations” with Beijing continued to take place.

“Markets took some relief on news that trade talks between the U.S. and China could be back on the menu as the U.S. gears up to impose tariffs on another $16 billion of Chinese imports — a move that will likely be met with an equal-sized retaliatory measure by China,” ANZ Head of FX Research Daniel Been said in a morning note, adding that details were lacking.

Market sentiment was somewhat affected by separate, less upbeat news on the trade front, with Reuters citing a source that the Trump administration intends to propose a larger 25 percent tariff on $200 billion worth of Chinese goods. That would be greater than the 10 percent tariff the administration had mentioned earlier this month.

The latest developments in the trade dispute between the world’s two largest economies came after U.S. tariffs on $34 billion worth of Chinese goods took effect early in July, a move that was swiftly met with retaliation from Beijing.

The mixed session also came after Wall Street advanced on Tuesday, which was also the last trading day of the month. For July, U.S. stocks recorded their largest monthly gains since January amid robust corporate earnings and economic data.

Around 60 percent of S&P 500 companies having reported results, with 82 percent of those announcing expectation-topping earnings, according to Thomson Reuters I/B/E/S.

In currencies, the dollar broadly firmed ahead of the conclusion of the Federal Reserve’s policy meeting. The dollar index, which tracks the greenback against a basket of currencies, last traded at 94.664.

Against the yen, the dollar traded at 112.06 at 2:42 p.m. HK/SIN. The Japanese currency extended declines after softening overnight when the Bank of Japan kept policy steady and made some minor communication tweaks.

Stateside, the Federal Open Market Committee will conclude its two-day meeting during U.S. hours and is expected to keep rates on hold.

— CNBC’s Fred Imbert contributed to this report.

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