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.

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