Breaking News
0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Dollar in narrow range as U.S.-China tensions simmer, virus cases rise

ForexJul 13, 2020 08:35PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. A trader shows U.S. dollar notes at a currency exchange booth in Peshawar

By Stanley White

TOKYO (Reuters) - The dollar was hemmed into narrow ranges against most currencies on Tuesday as renewed concerns about diplomatic tension between the United States and China and rising coronavirus cases put a dent in risk appetite.

The euro held onto gains against the greenback and the pound as investors await data on German investor sentiment to help gauge the pace of Europe's recovery from the health crisis.

Currency trading has thinned out as a recent resurgence of novel coronavirus infections has caused some areas to place new restrictions on business activity.

Markets now face an additional threat from tit-for-tat retaliation between Washington and Beijing over access to U.S. financial markets, civil liberties in Hong Kong, and territorial claims in the South China Sea.

"The focus has shifted to whether or not the next round of coronavirus lockdowns will be large enough to damage economic growth," said Junichi Ishikawa, senior foreign exchange strategist at IG Securities .

"The Hong Kong problem could potentially lead to new trade friction. Negative developments on either front could cause stocks to adjust lower, and drive some safe-haven flows to the dollar and the yen."

The dollar stood at 107.35 yen on Tuesday in Asia following a 0.4% gain in the previous session.

The dollar traded at 0.9419 Swiss franc after eking out three consecutive sessions of narrow gains.

The euro (EUR=) was quoted at $1.1346, resting below a one-month high reached on Monday. The common currency traded at 90.36 pence (EURGBP=), holding onto a 0.9% gain from the previous session.

The United States and China are waging diplomatic battles on several fronts that have the potential to unsettle financial markets.

U.S. President Donald Trump's administration plans to soon scrap a 2013 agreement between U.S. and Chinese auditing authorities, a senior State Department official told Reuters.

This move could foreshadow a broader crackdown on Chinese firms listed on U.S. stock markets that are under fire for sidestepping U.S. disclosure rules.

In addition, the United States has hardened its stance against China's claims in the South China Sea and is taking steps to end Hong Kong's special legal status in protest against Beijing's security law for the former British colony.

The opening of onshore trade in the yuan will be closely scrutinised on Tuesday to see if China's currency can continue its recent rally.

However, traders are likely to avoid big positions before the release this week of data on Chinese gross domestic product, retail sales, industrial output, and exports.

Demand for riskier assets is likely to take a hit after California, the most populous U.S. state, placed new restrictions on businesses as coronavirus cases and hospitalizations soared.

Elsewhere in currencies, the Australian dollar was little changed at $0.6935. Sentiment for the Aussie has taken a hit as some Australian states also re-impose coronavirus restrictions.

The New Zealand dollar fell slightly to $0.6530.

The Antipodean currencies are considered barometers of risk because of their close ties to commodities and China's economy.

Dollar in narrow range as U.S.-China tensions simmer, virus cases rise
 

Related Articles

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
James Marshall
James Marshall Jul 13, 2020 10:47PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
The liberal is the worst enemy to America and the world
Gershom Zvi
Gershom Zvi Jul 13, 2020 10:47PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
Absolutly !!!
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.
Continue with Google
or
Sign up with Email