Algorithmic trading might help push the yen up further.
The bill signed by the United States President Donald Trump threatens sanctions for human rights violations in Hong Kong. Since reverting to the Chinese rule from 1977, there is constant civil unrest in Hong Kong. Now protesters seek freedom.
Beijing blames the foreign states for meddling in Hong Kong’s affairs, and the city denied any undue influence.
For many, the U.S. legislation is symbolic. Nevertheless, if implemented, it has the potential to worsen the relations between China and the United States further.
Chinese and U.S. negotiators are trying to reach an agreement to stop the trade war. It would remove a massive headache from the global economy. But this bill is not helpful in this situation.
The U.S. government said that Chinese trade practices are unfair, so they imposed tariffs on China, and the latter answered with the same step.
The uncertainty of investors benefited the Swiss franc. From a two-month low, the currency pulled back to trade at 0.99875 versus the greenback.
Another safe-haven bought in times of this uncertainty. Gold rose 0.22% to $1,467.36 per ounce.
Greenback and Yen
The safe havens rise undermined the dollar. The dollar came into the Asian market on a high, cause the U.S. economic growth in the third quarter picked up slightly.
U.S.-made capital goods have also increased in nine months in October.
The yuan slightly changed versus the dollar at 7.0287. In the offshore market, the Yuan fell 0.16% to 7.0255 per greenback.
Against the dollar, the yen rose around 0.2% to 109.39.
As Yukio Ishizuki, a Foreign Exchange Strategist in Daiwa Securities in Tokyo, claims that the yen gained because Trump singed the Hong Kong bill.
In foreign trade, the yuan fell.
U.S. economic data limit the dollar’s downside.
The foreign ministry of China said it would take the necessary steps to answer the U.S.’s interference in the country’s issues. Negotiations are in danger.