{"id":2628,"date":"2020-05-28T07:31:21","date_gmt":"2020-05-28T07:31:21","guid":{"rendered":"https:\/\/forexvarsity.com\/welcome\/?p=2628"},"modified":"2020-05-28T07:35:52","modified_gmt":"2020-05-28T07:35:52","slug":"dollar-stands-its-ground-as-u-s-china-tensions-grow","status":"publish","type":"post","link":"https:\/\/forexvarsity.com\/welcome\/dollar-stands-its-ground-as-u-s-china-tensions-grow\/","title":{"rendered":"Dollar stands its ground as U.S.-China tensions grow"},"content":{"rendered":"\n

The dollar held its own on Thursday as rising Sino-U.S. tension put crushing pressure on the Chinese yuan<\/a> and proved a counterweight to optimism about the coronavirus recovery.<\/p>\n\n\n\n

The escalating war of words between the world’s two biggest economies also spilled over to the Australian and New Zealand dollars, as a far more cautious mood holds in currency markets compared with the ebullience rallying stocks.<\/p>\n\n\n\n

Hong Kong is the newest flashpoint, with U.S. Secretary of State Mike Pompeo saying on Wednesday that China’s plan to impose laws there was “only the latest in a series of actions that fundamentally undermine” the city’s autonomy and freedoms.<\/p>\n\n\n\n

The Chinese yuan , a barometer of U.S.-China relations, hit a record low of 7.1966 per dollar in offshore trade overnight and held close to that level on Thursday at 7.1805.<\/p>\n\n\n\n

The Aussie<\/a> and kiwi<\/a> backed off two-month highs hit in the London session and were becalmed, even as the re-opening of the world’s economies kept stock markets rallying. The Aussie was last at $0.6621 and the kiwi at $0.6188.<\/p>\n\n\n\n

“Overall, the macro story is hard to ignore, and things are picking up,” said Jason Wong, senior market strategist at BNZ in Wellington.<\/p>\n\n\n\n

“But down under, here, obviously China is an important part of what drives markets. Markets are awaiting China’s response (on Hong Kong) and we’re caught in the middle a little bit.”<\/p>\n\n\n\n

A Financial Times report which said coal traders and analysts expect China to tighten import rules also weighed on the Australian dollar, he said.<\/p>\n\n\n\n

Tensions have flared between Australia and China over the COVID-19 pandemic, while U.S.-China relations have nosedived amid regular attacks from the Trump administration over China’s handling of the virus.<\/p>\n\n\n\n

The United States is currently crafting a range of options to punish China over its tightening grip on Hong Kong, including sanctions, tariffs and restrictions on Chinese companies, according to people familiar with the discussions.<\/p>\n\n\n\n

Elsewhere, the dollar was marginally firmer against the Japanese yen , at 107.83 yen per dollar, and a touch weaker on the euro and pound.<\/p>\n\n\n\n

Against a basket of currencies (=USD<\/a>) it was steady at 98.863, a fraction above a two-month low hit overnight.<\/p>\n\n\n\n

The euro (EUR=<\/a>) rose to an eight-week peak of $1.1031 on Wednesday, climbing above its 200-day moving average, after the European Union’s executive unveiled a 750 billion euro plan to prop up the bloc’s virus-hit economies.<\/p>\n\n\n\n

It pulled back as doubts over the way forward in achieving the plan emerged and last sat at $1.1021. The pound was at $1.2263.<\/p>\n\n\n\n

“It is probably too early to say that the rally in the euro is the start of a major re-rating of European risk,” said Chris Turner, global head of markets at ING, in a note.<\/p>\n\n\n\n

“The path to getting (the) recovery fund carved out of the long term EU budget will be a bumpy one … thus it is hard to make the case that euro moves higher in a straight line from current levels.”<\/p>\n","protected":false},"excerpt":{"rendered":"

The dollar held its own on Thursday as rising Sino-U.S. tension put crushing pressure on the Chinese yuan and proved a counterweight to optimism about the coronavirus recovery. The escalating war of words between the world’s two biggest economies also spilled over to the Australian and New Zealand dollars, as a far Read more<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rop_custom_images_group":[],"rop_custom_messages_group":[],"rop_publish_now":"initial","rop_publish_now_accounts":[],"rop_publish_now_history":[],"rop_publish_now_status":"pending","_themeisle_gutenberg_block_has_review":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-2628","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/forexvarsity.com\/welcome\/wp-json\/wp\/v2\/posts\/2628","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forexvarsity.com\/welcome\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forexvarsity.com\/welcome\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forexvarsity.com\/welcome\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/forexvarsity.com\/welcome\/wp-json\/wp\/v2\/comments?post=2628"}],"version-history":[{"count":1,"href":"https:\/\/forexvarsity.com\/welcome\/wp-json\/wp\/v2\/posts\/2628\/revisions"}],"predecessor-version":[{"id":2629,"href":"https:\/\/forexvarsity.com\/welcome\/wp-json\/wp\/v2\/posts\/2628\/revisions\/2629"}],"wp:attachment":[{"href":"https:\/\/forexvarsity.com\/welcome\/wp-json\/wp\/v2\/media?parent=2628"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forexvarsity.com\/welcome\/wp-json\/wp\/v2\/categories?post=2628"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forexvarsity.com\/welcome\/wp-json\/wp\/v2\/tags?post=2628"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}