Global shares tumbled on Friday as Hong Kong’s political unrest returned as a flashpoint in fast-deteriorating U.S.-China relations, following Beijing’s moves to impose a new security law on the city.
The EUR/USD pair is feeling the pull of gravity on Friday with the American dollar drawing haven bids amid fears that China’s decision to impose new Hong Kong security law would lead to major US-China tussle.
The safe-haven yen gained 0.15% to 107.45 per dollar. The yen brushed off the Bank of Japan’s new lending scheme to channel more money to small businesses, which mimics the U.S. Federal Reserve’s “Main Street” programme.
The GBP/USD dropped 0.09% to 1.2202, with investors continuing to worry whether the Bank of England will cut interest rates below zero.
Oil prices slumped on Friday after China’s decision to omit an economic growth target for 2020 renewed concerns that the fallout from the coronavirus pandemic will continue to depress fuel demand in the world’s second-largest oil user. Gold was up on Friday, boosted by rising U.S.-China tensions as China plans controversial national security laws in Hong Kong.
A mix of developments from central banks, data, and the next moves in lockdowns will determine Friday’s trading. In the absence of any major market-moving economic releases, the broader market risk sentiment and the ECB Monetary Policy Meeting Accounts will be looked upon for some meaningful trading opportunities on the last day of the week.