Asian currencies remain Low. What about the U.S. dollar?

Asian currencies remain Low. What about the U.S. dollar?

Asian currencies fluctuated on Thursday due to the rising Sino-U.S. tensions and optimism over recovering global growth. On the other hand, the U.S. dollar remained steady. As the U.S. and China continue to exchange scathing comments, the Chinese Yuan remains under heavy pressure. It negatively influences the Antipodean currencies as well.

On Wednesday, the Yuan plummeted to a record low of 7.1966 per dollar in offshore trade. It then remained close to that level at 7.1852 on Thursday. Meanwhile, the Aussie and kiwi fell from their two-month highs hit in the London session, tumbling down as the sentiment soured during Asian trade.

The Australian dollar traded lower by 0.5% at $0.6592 by the end, while the New Zealand dollar declined to $0.6174.

Traders are watching the events in Hong Kong closely. On Wednesday, Mike Pompeo, U.S. Secretary of State, declared that China’s attempt to impose laws there was just the latest in a series of actions that fundamentally undermine Hong Kong’s autonomy and freedoms.

Jason Wong, the senior market strategist at BNZ in Wellington, noted that overall, the macro story is hard to ignore, as things are clearly picking up. However, China is an important part of what drives markets. They are awaiting China’s response to Hong Kong, and traders feel caught in the middle.

According to reports, currently, the U.S. is contemplating several options to punish China over its tightening grip on Hong Kong, sanctions, restrictions and tariffs on Chinese companies among them.

The Euro skyrocketed. What caused its rally?

The Euro hit a new eight-week high of $1.1035, boosted by a 750 billion euro European Union plan to help the economies affect by the virus. However, it soon lowered to $1.1006 due to the doubts about delivering the scheme.

Meanwhile, the U.S. dollar traded at 107.81 against the yen and at $1.2248 against the pound. It also lifted against a basket of currencies from the two-month low struck on Wednesday to 98.984.

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