The Japanese Yen hit a one-month high on Friday’s session

The dollar stopped lowering on Friday, while the safe-haven yen rose to a one-month high. Sino-U.S. tensions rose further after China retaliated for the closure of its consulate in Texas by ordering the United States to shut its Chengdu consulate.

The euro remained strong, but the Australian and New Zealand dollars fell from multi-month peaks, while the Chinese yuan stayed under pressure, at a two-week low.

According to China’s foreign ministry, on Friday morning, it told the U.S. embassy to close its consulate in the southwestern city of Chengdu. A few days earlier, Washington abruptly ordered the closure of the Chinese consulate in Houston.

On Thursday, U.S. Secretary of State Mike Pompeo spoke about Sino-U.S. relations. He stated that if the U.S. bends the knee now, their grandchildren may be at the mercy of the Chinese Communist Party, as their actions are presently the primary challenge in the free world.

Even though Asian trading volumes were lightened by a public holiday in Japan, the escalating tensions boosted the yen to 106.38 per dollar, its strongest point since late June.

Meanwhile, the Australian dollar tumbled down a fifth of a percent on the session, at $0.7086. The New Zealand dollar traded at $0.6625, under the 7-month high of $0.6690 touched on Thursday.

What about the Swiss Franc and other European currencies?

On the other hand, the safe-haven Swiss franc hit a four-month high of 0.9239 per dollar. U.S. employment data was weaker-than-expected, rattling U.S. markets overnight. And the conflict with China isn’t helping matters.

Markets have been relieved that so far neither side was prompted to abandon the trade deal, but traders are beginning to view it as a real risk. The Chinese yuan looks set for its worst week in two months. It last traded at 7.0206 per dollar.

The Euro gained 1.5% this week, its best since late June, and 3.3% for the month so far. It last stood at $1.1601, just below a 21-month high hit overnight. The British Pound held on to early-week gains at $1.2733.