The dollar has gains amid fresh tensions in the US-China By Reuters

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 after announcing its biggest gain of more than two weeks on Thursday.

sterling held steady at $ 1,2227 before data later on Friday is expected to show a slump in UK retail sales.

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 stood at 7.1314 pr. dollar on Friday after falling in the previous session the most at three weeks.

The focus is on whether the yuan broadens the decline in land trade today.

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 hero stable at 107.63 pr. dollar. The Bank of Japan is holding an emergency meeting later on Friday to decide the details of a lending scheme for small businesses damaged by the pandemic.

The antipodean currencies were nearing a loss as risk sentiment hit.

The Australian Dollar changed hands to $ 0.6568 after falling 0.4% Thursday while the New Zealand dollar last stood at $ 0.6123.