Let us check the market. Tensions have flared between China and Australia, on issues surrounding the COVID-19 pandemic. Continuing regular attacks from the Trump administration over Beijing’s handling of the virus have meant that China-U.S. relations have nosedived.
The United States is currently thinking about its options to punish China. This is because of China’s tightening grip on Hong Kong.
The options include restrictions on Chinese companies, tariffs, and sanctions. These are the relevant topics according to people familiar with the discussions.
Elsewhere, the United States dollar reeled in rivals.
The euro had a fresh eight-week high of $1.1035. A 750-billion-euro European Union plan bolstered it, by propping up the economies that were worst-hit by the virus within the bloc. Nevertheless, it retreated because doubts concerning delivering the scheme crept in and the value lasts at $1.1006.
Chris Turner is the global head of markets at ING. He said, in a note, that it is probably too early to say that the euro’s rally is the start of a significant re-rating of European risk.
The United States Dollar and Others
He said that the path to extract the recovery fund out of the long-term European Union budget would be a bumpy one. Therefore, it is hard to make the case that the euro is moving in a straight line according to current levels.
Moreover, with regards to the pound and yen, the greenback was steady. The United States dollar was holding at $1.2248 against the pound and buying 107.81 yen.
Against a basket of currencies, the greenback has raised from the two-month low it struck. Thus, on Wednesday, it was at 98.984.
The equity rally left the FX market behind – the tensions between China and the United States, especially Hong-Kong, drags on people’s moods. The Australian and New Zealand dollars are under pressure. The offshore yuan hovered near a record low.
Asian currencies were caught in a crosscurrent between rising tensions between China and the United States.
This is the current news of the market.
