US dollar gains amidst new US-China tensions
The US dollar was back in demand in early European trading on May 22. The US-China tensions are reignited once again and traders are returning to the safe-haven investments.
By 06:45 GMT the US Dollar Index gained 0.2% and stood at 99.627. EUR/USD lost 0.2% and reached 1.0925. GBP/USD lost 0.2% and stood at 1.2203.
This night Chinese government revealed its plans to introduce its newest security laws to Hong Kong. The decision will limit the autonomy of the region.
The prospect already caused new tensions in US-China relations. President Trump warned, that the United States will oppose the legislation “very strongly”. The Senate has already published a bill that would put sanctions against the selected Chinese state officials.
The yuan was also impacted by the decision of the Chinese government to not set a target of economic growth for this year. Investors consider that it proves that the consequences of the pandemic might stay for longer than expected.
USD/CNY gained 0.1% and stood at 7.1238 - the highest position in two months.