US Senate passes sweeping bill to address China tech threat

Anil Panchal FXStreet

Early Wednesday morning in Asia, Reuters conveyed 68-32 votes in favor of the US Innovation and Competition Act amid a Senate voting session.

“The US Senate on Tuesday voted 68-32 to approve a sweeping package of legislation intended to boost the country's ability to compete with Chinese technology, as Congress increasingly seeks to take a tough line against Beijing,” said the news.

Details suggest that the bill authorizes, per Reuters, $190 billion for provisions to strengthen U.S. technology and research -- and would separately approve spending about $50 billion to increase U.S. production and research into semiconductors and telecommunications equipment.

It should, however, be noted that the proposal needs to pass the House of Representatives before reaching President Joe Biden for a sign.

FX implications…

Amid the recently escalating US-China tussles, the passage of the bill, which is most likely, could add fuel to the tensions among the world’s top two economies. This should weigh on the market sentiment and put a safe-haven bid under the US dollar. It’s worth noting that S&P 500 Futures remain flat by the press time, showing no reaction to the news. However, AUD/USD, another risk-barometer, remains pressured.

Read: AUD/USD stays pressured towards 0.7700 ahead of RBA’s Kent, China CPI

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

AUD/USD hangs close to monthly lows, still defends 0.7100 ahead of Fed decision

AUD/USD retains its negative bias for the third straight day, defending 0.7100 while trading close to a monthly low in Wednesday's Asian session on Wednesday. The US Dollar stands firm near a two-week high as the anticipated Fed rate hike and oil-driven inflation fears continue to push US bond yields to a multi-year high. Furthermore, escalating Middle East tensions benefit the safe-haven buck and weigh on the risk-sensitive Aussie.

USD/JPY holds firm above 155.00, awaits Fed policy announcements

USD/JPY climbs to a fresh one-week high above 155.00 in the Asian session on Wednesday amid a bullish US Dollar. Oil-driven inflation fears, along with the anticipated Fed rate hike, continue to support surging US bond yields. Moreover, rising US-Iran tensions underpin the USD's reserve currency status. The pair, however, remains below the mid-155.00s as bulls seem hesitant ahead of the Fed decision later today and the BoJ meeting, starting on Thursday.

Gold bounces to $4,350; focus on the Fed

Gold sets aside two daily declines in a row, gathering some composure and revisiting the $4,350 zone per troy ounce amid decent gains midweek. The precious metal’s recovery comes despite an acceptable advance in the US Dollar and declining US Treasuty yields prior to the anticipated rate hike by the Fed.

XRP Price Forecast: XRP clings to 50-day EMA support after CLARITY Act setback

Ripple (XRP) trades lower around $1.28 on Wednesday, as investors broadly assess the impact of the failed United States (US) Senate vote on the CLARITY Act and the upcoming Federal Reserve (Fed) monetary decision. The remittance token has trimmed early-week gains that tagged highs around $1.50 on Monday and now holds key moving-average support.

Federal Reserve set to raise interest rate after five meetings on hold

The United States (US) Federal Reserve (Fed) announces its interest rate decision on Wednesday, following another pivotal meeting that could provide key insights into the monetary policy outlook heading into the end of the year.

How Japan became the World's Banker and why that era may be ending

Japan's ultra-low interest rates helped finance trillions of dollars in global investments for more than a decade, making the Japanese Yen one of the world’s cheapest sources of funding. With the Bank of Japan expected to tighten policy again this week, that advantage may be entering a new phase. While most major economies raised interest rates, Japan remained the world's outlier.