Against a basket of six major currencies, the dollar index has broken 92 level, as low as 91.78, which is the lowest level since May 2018, in Asian session on Tuesday.
The market believe that the Fed’s new policy framework will keep the interest rates at the low level for a longer period, causing the sell-off pressure of the dollar. The onshore RMB has strengthened to 6.81 level while the offshore price is trading at 6.82 level, compared to the levels around 6.84 and 6.85 on Monday.
Recently, news of TikTok’s transaction has become one of the key focus of the China-US tension. Earlier, China announced the revision of the export restriction terms, including the technology used by TikTok. Therefore, a prior approval from the Chinese government authorities is required for any TikTok transactions, which may affect the transaction process and cause delay.
The White House did not comment on China’s move. At the same time, the White House also stated that the transaction negotiation has not been suspended, and Trump’s administration will not intervene in the negotiation.
The latest news is that TikTok has selected a potential buyer already, and the transaction involves the company’s business in the US, New Zealand and Australia. The result will be announced as soon as Tuesday. Based on information over these days, potential buyers include Oracle, Microsoft and Wal-Mart. The estimated transaction price is between US$20 billion and US$30 billion.
Nevertheless, the tension between China and the US will not have any big change. Recently, there have been some kind of military frictions between both countries in the South China Sea and the Taiwan Strait. The US sanctions against some Chinese companies also triggered a further escalation of the tensions, meaning that any risk-off sentiment may arise in September.