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Hong Kong unrest pushes dollar higher

Chris Lee

The US dollar seemed to be on the verge of a rise in the forex markets on Tuesday and into Wednesday after unrest continued to occur in Hong Kong.

The autonomous city has long since been plagued by unrest by pro-democracy protestors who claim that it has been wrongly treated by China.

The protests have taken place again in recent weeks as the Chinese government proposes a new national security law for the area.

It is expected that US President Donald Trump will publicise his intended response to the new development this week.

According to a report in the outlet Bloomberg News, the US government is debating whether or not to target sanctions at those associated with the Chinese government.

The new wave of problems, however, appeared to herald a good day for the dollar, which looked set to rise in the markets.

Some traders who were concerned about the way that any potential new sanctions imposed on China by the US could affect the global economy seemed to want to put their investments into dollars.

This often happens due to the fact that dollars can be easily turned into cash.

It came despite the fact that there is still some risk-friendliness in the markets due to economies across the globe cautiously reopening following a lull in the coronavirus pandemic.

The greenback finally went up in its pair against sterling as trading kicked off on Wednesday, reaching $1.2320, which represented a welcome break for the US currency in that pair.

Over the Channel, meanwhile, the dollar was up to $1.0958 for each euro.

In its pair against the safe-haven Swiss franc, meanwhile, it was trading at 0.9669.

This was a far cry from the session before when it saw its value decrease by 0.6%.

Elsewhere around the world, the dollar appeared to show signs of being trapped in its pair against the Japanese yen.

It showed signs of being stuck at around 107.53 yen, despite the fact that the yen seemed to surge against the single currency in the increasingly volatile atmosphere.

There were also significant problems for the Antipodean currencies.

These currencies, which tend to rise and fall broadly in line with both global trade and with the fortunes of Australia’s major trading partner China, had done well recently.

However, by Wednesday, there were problems on the cards.

The Aussie dollar was down in its pair against the greenback, this time to $0.6642.

The New Zealand dollar was also down, this time to $0.6195.

In Europe, there was more controversy over the way that the economic response to the coronavirus pandemic was going to be paid for.

France and Germany recently instituted a plan to create a recovery fund worth €500bn.

Under this plan, grants would be given to sectors or areas struggling during the pandemic.

However, now some other European countries, such as Denmark, say that they want to pursue a system of loans instead.

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Chris Lee
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