By Stanley White
TOKYO (Reuters) – The dollar held gains against major currencies on Friday as worries about renewed diplomatic tension between the United States and China supported demand for safe haven for greenback.
The yuan was suffering losses in offshore trade, but further declines may be limited in the local session on Friday as Chinese officials are expected to unveil new economic stimulus measures.
Sino-American. Conditions have once again come across a wide range of issues, including China’s treatment of the former British colony of Hong Kong and its response to the coronavirus pandemic causing risk aversion to spread.
“There have been problems between the United States and China for quite some time now,” said Yukio Ishizuki, FX strategist at Daiwa Securities in Tokyo.
“Some very short-term players change positions from day to day, which makes it difficult to see the trend, but generally the dollar seems to be supported.”
The dollar was trading at $ 1.0950 a. Euro () in Asia on Friday following a 0.3% increase in the previous session.
The dollar bought 0.9705 Swiss francs
China is set to introduce new national security legislation against Hong Kong following last year’s unrest for democracy, a Chinese official said on Thursday.
U.S. President Donald Trump has warned that Washington will respond “very strongly” to the legislation.
There is a risk that Hong Kong may lose some of its favorite U.S. trading conditions that have helped it maintain its position as a global financial center.
Washington and Beijing are also at the forefront of Chinese companies’ access to advanced technology and criticism of Beijing’s response after the new coronavirus emerged late last year in the central Chinese province of Hubei.
The friction evokes memories of last year’s drawn-out trade war between the United States and China that roared across global financial markets.
Offshore, the yuan
The focus is on whether the yuan
Chinese Prime Minister Li Keqiang is expected to reveal stimulus measures when the National People’s Congress starts on Friday to spur its economy, which has been hit by coronavirus.
Elsewhere, the yen
The antipodean currencies were nearing a loss as risk sentiment hit.
The Australian Dollar
Fusion Media or anyone involved with Fusion Media assumes no liability for any loss or damage arising from the reliance on the information, including data, offers, charts and the purchase / sale of signals on this site. Be fully informed about the risks and costs associated with trading in the financial markets, it is one of the most risky types of investment.