3 months ago
Forex

U.S. Dollar Falls Despite Escalating U.S.-China Tension, Pound Flat

Investing.com - The U.S. dollar, which is widely considered a safe-haven asset, fell on Monday in Asia even after tension

Investing.com - The U.S. dollar, which is widely considered a safe-haven asset, fell on Monday in Asia even after tension with China escalated amid continuing concerns surrounding Chinese technology giant Huawei Technology.

The U.S. dollar index that tracks the greenback against a basket of other currencies was down 0.7% at 95.845 by 1:45 AM ET (06:45 GMT).

Tension with China remained in focus after reports over the weekend said Chinese Vice Foreign Minister Le Yucheng separately summoned both the US and Canadian ambassadors and lodged a "strong protest" urging Huawei Technology’s CFO Meng Wanzhou’s release.

Meng was arrested in Vancouver last week and faces extradition to the US, where she could be jailed for up to 30 years if found guilty.

Meanwhile, U.S. non-farm payrolls increased by 155,000 jobs last month, below economists' median forecast of 200,000 jobs, data showed. Wage increase was weaker than expected even though its annual rise remained near the highest level in almost a decade.

Fed Chairman Jerome Powell said last week that U.S. interest rates were nearing neutral levels, which markets interpreted as signalling a slowdown in rate rises.

The USD/CNY pair was up 0.3% at 6.8948. The People's Bank of China (PBOC) set the yuan reference rate at 6.8693 vs Friday's fix of 6.8664.

Chinese customs data showed on Saturday that the country’s November exports rose 5.4% from a year earlier, below the 10% jump predicted by a Reuters poll.

Annual growth for exports to all of China's major partners slowed significantly, according to the data.

Elsewhere, the USD/JPY pair fell 0.2% at 112.45 after data showed Japan’s third-quarter GDP was down at an annualised rate of 2.5%, compared with an initial estimate of a 1.2% contraction and against economists' median forecast for a 1.9% decline.

In Europe, Tuesday will see the UK parliamentary vote on Prime Minister Theresa May's current Brexit proposal. The GBP/USD pair was little changed at 1.2748 as UK markets remained cautious ahead of the vote.