Investing.com – The safe haven yen was higher against the U.S. dollar on Tuesday after U.S. authorities hit Chinese technology firm Huawei with criminal charges, ratcheting up trade tensions between the world’s two largest economies.
The U.S. Department of Justice , its chief financial officer and two affiliates with bank and wire fraud to violate sanctions against Iran.
Investors fear the charges could complicate set to begin on Wednesday when China’s Vice Premier Liu He will meet with U.S. Trade Representative Robert Lighthizer and others.
Unless an agreement is reached by March 1, U.S. President Donald Trump has said he will raise tariffs on Chinese imports from 10% to 25%, a move which investors fear will exacerbate the global economic slowdown.
“There is a much lesser chance now that we get anything positive out of these trade negotiations,” said Nick Twidale, chief operating officer at Rakuten Securities.
“This is likely to be bad for risky assets such as stocks and we expect the dollar/yen and Australian dollar to be under pressure,” Twidale said.
The yen, a currency sought out during times of market uncertainty or economic stress, was higher against the greenback, with down 0.1% at a more than one-week low of 109.23 by 03:48 AM ET (08:48 GMT).
The , a gauge of its value versus six major peers, was down 0.11% at a two-week low of 95.31.
Investors are looking ahead to the upcoming Federal Reserve policy announcement on Wednesday where Chairman Jerome Powell is widely expected to acknowledge as global momentum weakens.
Investors expect the Fed to adopt a more cautious stance on policy than they did in 2018, pressured by signs of a peak in U.S. corporate earnings and the loss of economic momentum both at home and globally.
The euro was a touch higher, with changing hands at 1.1447.
The British pound was flat, with at 1.3162 ahead of a series of votes on later in the day after the overwhelming rejection of Prime Minister Teresa’s May’s Brexit plan earlier this month.
Britain is set to leave the European Union on March 29, but the country’s members of parliament remain far from agreeing a divorce deal
Sterling was weaker against the firmer euro, with rising 0.17% to 0.8692.
— Reuters contributed to this report
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