Dollar bounces as U.S.-China tensions dampen mood

21.05.2020 - Evdokimov Roman
Dollar bounces as U.S.-China tensions dampen mood

The dollar bounced on Thursday as the market mood turned positive, but U.S.-China tensions and weak economic indicators weighed in.

The euro, as well as the Australian and New Zealand dollars, lost half of its overnight gains. The pound also slipped as soft inflation hinted at negative rates.

The Australian dollar stood at $0.6561 and the New Zealand dollar at $0.6124.

The euro slid 0.2% to $1.0963, while the Japanese yen steadied at 107.64 on the dollar.

Diplomatic relations between the U.S. and China were dampened in recent weeks as President Donald Trump attacked Beijing for poorly handling the coronavirus outbreak. 

The latest rift came on Wednesday night when Trump accused China of a “massive disinformation campaign” aimed to hurt his election chances.

Australia is also caught in trade tensions with China as the former pushed for inquiry on the origins of the virus.

The dollar gained 0.2% to 7.1031 on the yuan in onshore trade. The dollar index was up 0.2% to 99.328.

The pound fell 0.3% to $1.2198 and plunged to a two-week low of 89.88 pence on the euro.

Elsewhere, the World Health Organization posted the biggest one-day jump in global coronavirus cases overnight as infections are almost at 5 million.

Japan reported its sharpest fall in exports in over a decade as the country heads to a recession.

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