US House Speaker Nancy Pelosi told Taiwan parliament's deputy head on Wednesday that they want to increase parliamentary exchanges with Taiwan.

Its calm so far on the military front, although Russian naval ships have made independent transits and joined with Chinese ships sailing near disputed Taiwan islands. It’s worth noting that China and Russia recently pledged a 'no limits' friendship.

Meanwhile, China has continued to impose trade sanctions on Taiwan, as Beijing continues its dismay over Pelosi's visit to Taiwan through August 4. Since Monday, China Customs Administration has suspended imports of more than 2,000 of about 3,200 food products from Taiwan.

“The Chinese Communist party is extremely hostile towards Tsai’s DPP, which it describes as “Taiwan independence elements” despite the fact that the party supports keeping the status quo in the Taiwan Strait,” per the Financial Times (FT).

Market reaction

Risk sentiment is on a firmer footing so far during this Wednesday’s Asian trading, with S&P 500 futures 0.13% higher on the day.

At the press time, AUD/USD is flipping to gains near 0.6920 on upbeat Chinese Caixin Services PMI and a thaw in the US-China tensions over Taiwan.