Wed, 15 Jul 2020

U.S. dollar dives on Asian markets, stocks adrift

Lola Evans
29 May 2020, 18:42 GMT+10

SYDNEY, NSW, Australia - Stocks in Asia skidded on Friday, and the U.S. dollar dived, as the relationship between the U.S. and China deteriorated.

The latest dissatisfaction of the U.S. is towards the Chinese parliament which a day earlier passed a resolution implementing new security laws for Hong Kong. The vote was approved by more than 2,800 lawmakers, with only one voting against it.

U.S. President Donald Trump went on the warpath over the new law, threatening consequences, the details of which he has vowed to reveal at a press conference later on Friday.

"It is seen as a major threat to the rally we've had and the recovery," Shane Oliver, chief economist at Australian wealth manager AMP Capital told Reuters Thomson Friday.

"If it's at the relatively mild end, then I don't think it would derail the recovery bull market, but if it's at the more extreme end with tariffs and harsh treatment of Hong Kong, then I think it gets more problematic," Oliver added.

The Nikkei 225 fell 38.42 points or 0.18%, to close Friday at 21,877.89.

In Hong Kong, the Hang Seng weakened by 171.29 points or 0.74^ to 22,966.47.

China's Shanghai Composite went against the trend, but gains were negligible.

The Australian All Ordinaries shed 85.60 points or 1.44% to 5,872.20.

On foreign exchange markets the greenback was softer across the board. The euro cruised above 1.1100 mark to trade at 1.1105 around the close in Sydney on Friday. The British pound strengthened to 1.2308. The Japanese yen was stronger at 107.25. The Swiss franc rose to 0.9635.

The Canadian dollar firmed to 1.3772. The Australian dollar appreciated to 0.6651. The New Zealand dollar jumped to 0.6205.

Overnight on Wall Street, the Dow Jones Industrial Average was down 147.63 points, or 0.58%, at 25,400.64.

The Standard and Poor's 500 fell 6.4 points, or 0.21%, to 3,029.73.

The Nasdaq Composite weakened by 43.37 points, or 0.46%, to 9,368.99.

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