Let us check the market. The United States hard hardened its stance in opposition to China’s claims in the South China Sea. Moreover, the United States is taking a position to end Hong Kong’s unique legal status in protest of Beijing’s security law for the former British colony.
On Tuesday, the opening of coastal trade in the yuan will be closely scrutinized. The reason for this is to see if the China’s currency can continue its recent rally.
Nevertheless, traders will most probably avoid prominent positions. This will be before the release of Chinse gross domestic product, exports, industrial output, and industrial output data this week.
California is the most populous state of America. It recently placed new restrictions on businesses. This is because hospitalizations and coronavirus cases soared there. Thus, the demand for riskier assets will most probably take a hit.
The United States Dollar and Other Currencies
The Australian dollar was little changed, at $0.6935. Some Australian states also re-impose coronavirus restrictions. Thus, sentiment for the Aussie has taken a hit.
The Kiwi fell slightly to $0.6530.
The Antipodean currencies are barometers of risk. This is because of their close ties to China’s economy and commodities.
Renewed concerns about rising coronavirus cases and tension between the United States and China put a dent in risk appetite. The United States dollar was hemmed into narrow ranges against most currencies on Tuesday.
Investors wait for the data on German investor sentiment. This is to help gauge the pace of recovery of Europe from the health crisis. Thus, the euro held onto its gains against the United States dollar and pound.
There was a recent comeback of novel coronavirus infections. This thus caused some areas to place new restrictions on business activity. As a result, currency trading has thinned out.
Markets face an additional threat from the tit-for-tat relations between Washington and Beijing.
On Tuesday, the United States dollar stood at 107.35 yen in Asia, following a 0.4% gain in the previous session.
This is the current news of the market.
