King Dollar gains on fresh Sino-US tension; offshore yuan hits two-month lows



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King Dollar gains on fresh Sino-US tension; offshore yuan hits two-month lows

On Friday, the US Dollar index (DXY) rose against a basket of six major currencies on an average, mostly buoyed up by a revival of safe-haven bid following further escalation of a fresh wave of Sino-US tension, while investors appeared to have fled riskier assets such as euro and offshore yuan over frets of a fast-straining Sino-US tie-up.

In point of fact, Friday’s rally of the American currency came forth as China had revealed a plan to incline a National Security Law particularly engineered to prevail the pro-democracy protest in Hong Kong, which in effect would enable the mainland intelligence offices to set up bases in the long-cherished financial HubSpot of the Asian continent, while ratcheting up the tensions further, the US President Donald Trump alongside his administration had blacklisted 33 Chinese firms, institutions and Government organizations and threatened China over its recently approved plan to impose the National Security Law on Hong Kong.

Besides, amid such garrulous outlook over the Sino-US trade frontiers, which analysts said could even witness a temporary nullification of the “Phase One” trade deal, investors fled the riskier assets and commodities, while the US Dollar index rose by 0.4 per cent to 99.78 on Friday.

Nonetheless, the index had reported a 0.6 per cent weekly decline.

US Dollar surges on revival of safe-haven appeal; Sino-US tension jitters

Citing statistics, on Friday’s market wind down, the bloc’s single currency shed 0.5 per cent against its American counterpart to $1.0900, while the offshore Chinese Yuan fell to a two-month low of 7.1645.

In tandem, the onshore Yuan had hit an eight-month low. Aside from that, beside the Southern Pacific, the Australian Dollar fell by 0.5 per cent to $0.6534 and the New Zealand Dollar shed 0.5 per cent to $0.6096 against the greenback.

On top of that, the British currency fell by 0.4 per cent to $1.2163 following reveal of a record 18 per cent plunge in April retail sales. Meanwhile, referring to a flight-to-safety response of the investors amid a fast-deteriorating Sino-US trade tie-up, a senior FX analyst at Silicon Valley Bank in Santa Clara, CA, Minh Trang said on Friday’s closing bell, “It’s definitely a risk-off kind of day.

These types of headlines certainly give a little bit of a jolt to the overall market, and you are seeing the result of that today.