Dollar Up Alongside Rising U.S.-China Tensions

imageForex8 hours ago (May 28, 2020 11:32PM ET)

(C) Reuters.

By Gina Lee – The dollar ended the week with gains in Asia, with U.S.-China tensions nearing a boiling point.

Tensions have been simmering throughout the week, triggered by China’s national security laws for Hong Kong and Macau during the previous week. China’s National People’s Congress approved the enactment of the law in Hong Kong on Thursday.

U.S. President Donald Trump will announce his response to the approval at a press conference later in the day.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies gained 0.03% to 98.405 by 11:22 PM ET (4:22 PM GMT), with investors turning to the safe-have asset.

“At the moment, hopes for economic recovery are strong, but I expect this to gradually fade to increased concern about the U.S.-China relationship,” Minori Uchida, head of global market research at MUFG Bank, told CNBC.

“When that happens, there will be more risk-off trades, which supports buying of both the dollar and the yen.”

Meanwhile, the USD/JPY pair was down 0.22% to 107.39.

The USD/CNY pair gained 0.10% to 7.1521. Investors will be paying close attention to the yuan, as well as the Chinese stock market, to gauge investor sentiment ahead of the press conference.

The AUD/USD pair was up 0.11% to 0.6643 while the NZD/USD pair slid 0.03% to 0.6205.

The GBP/USD pair rose 0.09% to 1.2327, with the pound supported by broad dollar selling during the week.

Dollar Up Alongside Rising U.S.-China Tensions

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Leave a Reply

Your email address will not be published. Required fields are marked *