Dollar Up on Back of Rising U.S.-China Tensions

Dollar Up on Back of Rising U.S.-China Tensions

imageForex18 hours ago (May 27, 2020 12:12AM ET)

(C) Reuters.

By Gina Lee – The dollar was up on Wednesday morning in Asia with U.S.-China tensions mounting over the latter’s national security laws for Hong Kong and Macau.

A planned protest in Hong Kong as the city’s Legislative Council begins to debate a national anthem bill, failed to draw the expected numbers.

U.S. President Donald Trump promised a U.S. reaction to the law by the end of the week. Meanwhile, China retaliated by threatening countermeasures against any U.S. action, including sanctions.

The U.S. Dollar Index that tracks the greenback against a basket of other currencies was up 0.26% to 99.168 by 12:06 AM ET (5:06 AM GMT), with investors turning to the safe-haven asset.

“We are in a broad risk-on trend, but the only thing that can change this is the U.S.-China relationship,”. Junichi Ishikawa, senior FX strategist at IG Securities, told CNBC.

“More problems between these two countries would slow the dollar’s recent decline and potentially lead to dollar buying as a safe haven.”

The USD/JPY pair was up 0.02% to 107.55 and the USD/CNY pair was up 0.34% to 7.1582

The AUD/USD pair lost 0.10% to 0.6644 and the NZD/USD pair was down 0.14% to 0.6188. The Antipodean currencies, with close ties to the Chinese economy and global commodities, took hits as the tensions reduced investors’ risk appetite.

The GBP/USD pair lost 0.13% to 1.2315.

Dollar Up on Back of Rising U.S.-China Tensions

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