The US dollar index (DXY) rose 0.4 per cent to around 92.10 in trading today (March 23). Markets were swayed by concerns about the U.S.-China conflict ahead of speeches by central bank leaders and the United States Treasury Secretary. 

The plan is that the speech will be held later tonight. Safe haven demand pushed the Greenback ahead versus a variety of major currencies, particularly the commodity dollar and GBP. It is known that there have previously been allegations of human rights abuses in Xinjiang. 

This issue has previously been heard very often, raising tensions between the U.S. and China relations. America and its allies (including the European Union and Britain) are known to impose sanctions in the form of travel bans. 

They also suspended assets to a number of Chinese officials and organizations on Monday. China is not silent and retaliates with a variety of actions taken further. Here is the further information about that update.

Respond of China to the Decision of the United States

Beijing immediately retaliated by imposing sanctions on a series of European officials and diplomats and their families. It is for sure that the decision then had a considerable impact. This is mainly for the relationship between the two countries that had previously improved.

MEMBERS of the EU Parliament retaliated by stating that the trade deal the two sides recently discussed could be dissolved. The deal could be scrapped. The tensions that emerged immediately hit the performance of Asian and European stock exchanges today.

This remains the case even though the USD/CNY pair only strengthened slightly by about 0.1 percent. Market participants seem to be continuing to monitor the progress of this dispute. If tensions between China and America continue, they will take action to keep their investments safe.

The fall in Asian stock markets could be due to sanctions. This was revealed by Iris Pang, chief economist at ING. Her statement was reasonable because more pressure from international politics would affect asset markets. That's a common count.

EUR / USD Weakens Again

Meanwhile, the EUR/USD currency pair reportedly weakened again by about 0.30 percent to the 1.1880s range at the start of the European session. Support for the crisis in Turkey is fading. This is because the Lira exchange rate has hinted at new stability in the market.

That is especially after the currency fell at the beginning of last week. On the other hand, the scramble to get the AstraZeneca vaccine between the UK and the EU has had an adverse impact. That is clearly detrimental to the outlook of both regions themselves.

Market participants will next monitor speeches from several key U.S. central bank officials. One of them is the Chairman of the Fed named Jerome Powell. U.S. Treasury Secretary Janet Yellen is also scheduled to give her opinion in the next few hours. 

No wonder then that market participants began to pay attention to the possibility. For your information, the USD could potentially rise higher if they again signal tolerance for recent bond yield hikes. But the weakening chance remains.

What is the Market Looking for?

So far, the Dollar is likely to weaken if there are indications of a split. The point is that if the Fed officials will later disagree. Markets are interested to know the extent to which U.S. bond yields will rise in the future. 

Earlier, top Fed officials had said it would keep interest rates low. They said they would stick to that decision until 2023. However, there could be Fed officials who disagree with the decision. That's what to watch out for.

This was said by Yukio Ishizuki, a senior strategist at Daiwa Securities. Therefore, many parties now hope that the organization's officials will remain compact with their decisions. That kind of decision is good for the price movement.