The declining Dollar, slipping again in the face of tensions in US-China

By Gina Lee

The us dollar was lower Monday morning, starting the week under the pressure of increasing tensions between the United States and China, in the latest disagreement between the two countries.

The last conflict comes from the order of the u.s. State Department to close the consulate chinese in Houston in 72 hours during the previous week. China retaliated by ordering the United States to close its consulate in Chengdu on Friday, with a deadline set for Monday.

The american secretary of State Michael Pompeo has again fanned the flames last week when he suggested that Washington and its allies must use “more creative ways and more confidence” to change the habits of China.

The two countries also disagree on issues such as trade, the law of national security of Hong Kong, Xinjiang, and the claims of the chinese in the south China sea.

“The common factor is the continuing decline in us yields,” said Reuters, Ray Attrill, head of exchange-rate strategy at the National Australia Bank (OTC:NABZY). The yields fell as the bond market is experiencing a slow recovery in the United States, depriving the dollar of a attraction reliable.

“The message of the end of the last week is that the deterioration of the risk sentiment alone may not in itself provide the dollar support, significant and sustainable. I think it will take a lot more [of the deterioration of the feeling] to really put in the foreground the characteristics of a reserve currency and safe haven of the dollar,” warned Attrill.

The us dollar index, which tracks the greenback against a basket of other currencies, slipped 0.45% to 93,955 at 9: 55, continuing its fall from Friday.

The pair USD/JPY declined 0.52% to 105,57, with the re-opening of japanese markets after two days of vacation.

The AUD/USD pair gained 0.42% to 0,7132 and the pair NZD/USD was up 0.35% to 0,6667. The two currencies are at risk of the Antipodes, which is closely related to raw materials and to China, won on the back of the collapse of the dollar.

The pair USD/CNY has fallen by 0.18% to 7,0014. China has indicated that the profits the industry made a leap of 11.50% year-on-year in June, earlier in the day.

The pair GBP/USD gained 0.37 percent to 1,2837.

Investors will look to the u.s. federal Reserve, which is expected to meet later in the week, for clues on the u.s. economic recovery.

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