Dollar Climbs As U.S.-China Tensions Escalate
May 26 2020 - 11:50PM
RTTF2
The U.S. dollar appreciated against its key counterparts in the
Asian session on Wednesday, amid rising tensions between Washington
and Beijing after a media report that the Trump administration is
mulling fresh sanctions on China.
Bloomberg reported that the Treasury Department is weighing
economic sanctions on Chinese officials, businesses and financial
institutions, if a proposed Chinese crackdown goes ahead.
U.S. President Donald Trump said late on Tuesday the country was
working on a strong response to China's planned national security
legislation for Hong Kong, without giving further details. He
indicated that details would be released before the end of the
week.
In Hong Kong, hundreds of riot police ringed the city's
legislature to stifle any protests ahead of a debate over a bill
that would criminalize disrespect of China's national anthem.
Beijing has reportedly expanded the scope of the draft national
security legislation to include banning not just behavior or acts
that endanger national security, but also activities.
Investors await regional factory figures and the Federal
Reserve's "beige book" of economic conditions due later in the
day.
The greenback rose to 1.2304 against the pound, from a low of
1.2339 hit at 5:15 pm ET. The greenback is seen finding resistance
around the 1.21 level.
The greenback edged up to 1.0951 against the euro, after falling
to 1.0985 at 7:30 pm ET. The greenback is likely to find resistance
around the 1.08 level.
The USD/CHF pair was trading higher at 0.9673. On the upside,
1.00 is likely seen as its next resistance level.
The greenback ticked up to 0.6631 against the aussie and 0.6179
against the kiwi and held steady thereafter. If the greenback rises
further, 0.62 and 0.585 are likely seen as its next resistance
levels against the aussie and the kiwi, respectively.
The greenback recovered to 107.62 against the yen, from a 5-day
low of 107.37 set earlier in the session. Next key resistance for
the greenback is seen around the 112.00 mark.
In contrast, the greenback fell against the loonie with the pair
trading at 1.3780. The currency may locate support around the 1.33
level.
Looking ahead, Canada building permits for April and Fed's Beige
book report are set for release in the New York session.
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