EUR/JPY: Back below 120.00 on US-China political tensions
- EUR/JPY has dropped below 120.00 on risk aversion.
- The anti-risk Japanese Yen is drawing bids on the US-China political friction.
- Beijing has urged the US to stop interfering in Hong Kong and has warned of retaliation.
EUR/JPY is currently reporting losses below 120.00, possibly due to the US-China political tensions and the resulting haven demand for the anti-risk Japanese Yen.
The US House of Representatives on Tuesday approved bipartisan legislation in support of human rights in Hong Kong, moving the Hong Kong Human Rights and Democracy Act of 2019 a step closer to becoming law.
The US move has irked China and the latter has urged Washington to stop using Hong Kong-related bills to interfere in China's internal matter. Beijing has also warned of retaliation, forcing markets to price in the possibility of escalation of political friction.
The Yen, therefore, is finding takers, and so is Gold, which is currently trading at $1,484 per Oz, having hit a low of $1,480 earlier today.
The anti-risk Japanese currency may continue to draw bids during the day ahead as the S&P 500 futures are losing altitude. As of writing, the equity index futures are reporting a 0.27% drop and the EUR/JPY pair is trading at 119.84, having hit a low of 119.74 soon before press time.
Also, experts believe the US wants to make full use of the Hong Kong turmoil and keep the fire burning before the next round of trade talks with China.
Technical levels
Author
Omkar Godbole
FXStreet Contributor
Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.
