The US dollar edged higher on Monday as concerns about a US-China standoff over Hong Kong civil liberties fuelled demand for safe haven currencies. 

The yuan and the dollars in Australia and New Zealand fell as foreign exchange markets were hit by risk aversion. 

The yuan slightly eased in onshore trade to 7,1422 per US dollar, coming near the lowest in more than seven months. 

Trading can be subdued Monday with financial markets closed for public holidays in Singapore, Britain and the United States. 

“The biggest concern is the tension between the US and China,” said Takuya Kanda, General Research Manager at Tokyo’s Research Institute. 

“Things have already been bad, and it is likely to get worse due to the Hong Kong security law. This supports risk-off trades, which is positive for the dollar and the yen.” 

Sterling was on the defensive after members of British Prime Minister Boris Johnson’s party called for an influential aide to resign during the coronavirus lockdown to break travel restrictions. 

The British pound traded in the local market at HK$9.44 and was little changed at US$ 1.2175 against the greenback. The sterling was trading at 89.46 pence against the euro. 

As risk aversion offset optimism about the emergence of the country from coronavirus lockdowns, the Australian dollar gave up early gains to trade at US$ 0.6528.

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