Dollar Traders Wary of US-Sino Rift – 23 July 2020

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In the UK, concerns over the Brexit continue to weigh on the currency.

USDThe US Dollar fell out of favor with FX traders during London trading on Thursday. Market players are cautiously watching for more fallout from the escalating tensions between China and the U.S. On Wednesday, the Chinese consulate in Houston was ordered to wrap up operations and close by Friday after it was alleged that officials had been spying. With Beijing vowing that it will respond in kind, that sent the Chinese Yuan to a 2-month low yesterday, with a slight reversal today. Currency strategists say that the retaliation will likely offer some guidance as to how Beijing intends to engage as we move closer to the November elections.

Any major fundamental issue in China tends to impact Antipodean currencies and this news is no different. As of 10:20 am in London, the AUD/USD was trading at $0.7146, up 0.1037%; the pair has ranged from a low of $0.71315 to a high of $0.71623. The NZD/USD was also higher at $0.6673, up 0.2373%, and off the session peak of $0.66912.

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In the UK, concerns over the Brexit continue to weigh on the currency. Today is the last day that the negotiations will take place, and analysts say that the tone of the statement afterward will drive sentiment. Some FX traders are worried that the UK government might be willing to close out the year without an agreement in place. The GBP/USD was lower, trading at $1.272, down 0.0864%; the pair earlier hit a trough of $1.26980. The EUR/GBP was higher at 0.9107 Pence, a gain of 0.2003%.

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