By Peter Nurse
Investing.com – U.S. dollar has seen some sell in early European trade on Monday, but from high heights as tensions between China and the U.S. keep pouting and Japan goes into recession.
Kl. At 2:40 pm ET (0645 GMT), the one that tracks the greenback against a basket of six other currencies stood at 100.362, a 0.1% drop after it reached a three-week high earlier Monday. rose 0.1% to 1.0823.
White House trade adviser Peter Navarro added the bad blood between the U.S. and China over the weekend when he suggested in an interview with ABC’s “This Week” that Beijing sent “hundreds of thousands of Chinese by air to Milan, New York and around the world” to spread the virus after concealing it the world for two months.
The Trump administration has been keen to paint China as the bad guys in terms of the outbreak and spread of coronavirus, not least in light of the November presidential election, which is now less than six months away.
Late Friday, U.S. moved to block chip supplies for Huawei Technologies, part of its plan to stop the Chinese telecommunications rollout of 5G mobile broadband.
The official yuan rate, which is extremely sensitive to the relationship between the world’s two largest economies, was at a backward pace, falling to its lowest level since early April.
“We would be surprised if PBoC does not allow slow but safe paths higher towards November,” analysts at Nordea said in a research note to clients, “given the crystal clear risk of a re-escalation of customs wars and ongoing reboot issues of credit growth in China. ”
At 02:00 AM ET traded USD / CNY at 7.1128, up 0.2%.
Elsewhere, Japan’s economy has fallen into recession for the first time in four and a half years.
The world’s third-largest economy shrank 3.4% from January to March, the second straight quarter of decline. And the second quarter is expected to look far worse as economists look for the 22% decline in gross domestic product – the biggest record decline.
At 0240 AM ET, 0.15% rose to 107.18.
In addition, the pound remains weak after falling overnight to $ 1,2076, its lowest since the end of March. The uncertainty surrounding a post-EU trade agreement with Brexit has continued to weigh. Bank of England chief economist Andrew Haldane also said over the weekend that the bank is again looking at negative interest rates after rejecting the tool earlier.
“The economy is weaker than a year ago and we are now at the effective lower limit, so in that sense it’s something we have to look at – look at – with some greater momentum,” Haldane told the Telegraph. “How could we not be?”
At 0240 AM ET, the increase was 0.1% at 1.2109.
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