The US House has passed a bill demanding sanctions on senior Chinese officials - RTRS
|- US House has passed a bill demanding sanctions on senior Chinese officials over the treatment of Uighur Muslim minority.
- Bill would have to be approved again by the Senate before being sent to Trump.
- Risk-off is the current theme and headlines such as this can fuel a bid in the yen.
The US House has passed a bill demanding sanctions on senior Chinese officials over the treatment of Uighur Muslim minority, voting continues, according to a Reuters story.
Earlier, the US House of Representatives on Tuesday debated a bill that would require the Trump administration to toughen its response to China’s crackdown on its Muslim minority, demanding sanctions on senior Chinese officials and export bans.
Background
Reuters reported earlier that, "the Uighur Act of 2019 is a stronger version of a bill that angered Beijing when it passed the Senate in September and calls on President Donald Trump to impose sanctions for the first time on a member of China’s powerful politburo, even as he seeks a deal with Beijing to end a damaging trade war buffeting the global economy."
"It also calls for sanctions against senior Chinese officials who it says are responsible and specifically names Xinjiang Communist Party Secretary Chen Quanguo, who, as a politburo member, is in the upper echelons of China’s leadership...It has warned of retaliation “in proportion” if Chen were targeted."
Lastly, the bill would have to be approved again by the Senate before being sent to Trump. "The White House has yet to say whether Trump would sign or veto the bill, which contains a provision allowing the president to waive sanctions if he determines this to be in the national interest," Reuters reported earlier.
FX implications
While this itself is not going to be an immediate risk for markets, it is just yet another provocation with respect to the Chinese and US stand-off and is not going to do trade-deal progress any favours, with respect to market sentiment. This will all be factored into risk, headline by headline, mounting to a likely risk-off scenario which ultimately will go to support the yen and weigh on AUD/JPY and the yuan.
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