Last night US Senate unanimously passed a resolution in support of Hong Kong protesters raising the ire of officials in Beijing. Under the first Senate bill, U.S. Secretary of State Mike Pompeo would have to certify at least once a year that Hong Kong retains enough autonomy to qualify for special U.S. trading consideration that bolsters its status as a world financial center. It also would provide for sanctions against officials responsible for human rights violations in Hong Kong.

According to Reuters,” There was no immediate response from the White House, which has yet to say whether Trump would approve the Hong Kong Human Rights bill. A U.S. official said recently that no decision had been made, but the unanimous Senate vote could make a veto more difficult for the Republican president.”

The political standoff comes at a time of stalled negotiations and worries from investors that Trump Administration may escalate tariffs against Chinese goods creating a second round of contraction in global manufacturing. With risk assets at near all-time highs, the prospect of a sharp profit-taking selloff in equities remains high, but so far stocks have held their own dropping only 50 basis points overnight and keeping USDJPY stable near the 108.50 figure.

If however, selling intensifies as the day proceeds then the pair could test the 108.00 figure as shorts press their case.

Author

Boris Schlossberg

BKTraders and Prop Traders Edge

Boris Schlossberg was key speaker at the FXstreet.com International Traders Conferences 2010. Mr. Boris Schlossberg is a leading foreign exchange expert with more than 20 years of financial market experience.

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