HK row sends US dollar soaring, yuan weakens - RTHK
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HK row sends US dollar soaring, yuan weakens

2020-05-25 HKT 15:24
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  • In onshore trade, the yuan is approaching its lowest level in more than seven months. File photo: AFP
    In onshore trade, the yuan is approaching its lowest level in more than seven months. File photo: AFP
The US dollar edged higher on Monday as worries about a standoff between the United States and China over civil liberties in Hong Kong fuelled demand for safe-haven currencies.

The yuan and the Australian and New Zealand dollars fell as risk-aversion hit foreign exchange markets.

In onshore trade, the yuan eased slightly to 7.1422 per US dollar, approaching the lowest in more than seven months.

Trading may be subdued on Monday with financial markets in Singapore, Britain and the United States closed for public holidays.

"The biggest concern is the tension between the United States and China," said Takuya Kanda, general manager of research at Gaitame.com Research Institute in Tokyo.

"Things were already bad, and it is likely to get worse because of the Hong Kong security law. This supports risk-off trades, which is positive for the dollar and the yen."

Sterling was on the defensive after members of British Prime Minister Boris Johnson's party called for the resignation of an influential aide for breaking travel restrictions during the coronavirus lockdown.

The British pound was trading at HK$9.44 in the local market and was little changed against the greenback, at US$1.2175. Against the euro, sterling traded at 89.46 pence.

The Australian dollar gave up early gains to trade at US$0.6528 as risk aversion offset optimism about the country's emergence from coronavirus lockdowns. (Reuters)