On Wednesday, the Chinese yuan edged down versus the U.S. dollar in Asia subsequent report that Huawei filed new legal action against Washington.
The USD/CNY pair soared 0.1 percent to 6.9132.
Chinese giant tech Huawei Technologies filed a legal action against the U.S. government and defied the constitutionality of a U.S. law banning federal organizations from buying its product.
Banning Huawei using cybersecurity as an excuse “will do nothing to make networks more secure. They provide a false sense of security, and distract attention from the real challenges we face,” said Song Liuping, Huawei’s chief legal officer.
“Politicians in the U.S. are using the strength of an entire nation to come after a private company,” Song noted. “This is not normal. Almost never seen in history.”
The news occurred following the rising U.S. and China trade tensions after President Trump hiked tariffs on $200 billion of Chinese goods from 10 percent to 25 percent.
Beijing hit back by rising tariffs on $60 billion worth of American products.
Fears of an extended U.S. and China trade spat heightened this week after President Trump said the U.S. was “not ready” to make a trade deal with China.
“They would like to make a deal. We’re not ready to make a deal,” said Trump.
In other news, China's central bank said it will inject CNY 270 billion ($39.09 billion) through seven-day reverse bond repurchase contracts on Wednesday, according to a news agency.
In the report said the amount of daily net cash injection thru reverse repo operations is the largest since January 17, 2019. The PBOC has injected a net 400 billion yuan so far this week.
In the meantime, Trump and his government again abstained from labeling China a currency manipulator, according to a report on Tuesday.
A senior Treasury official told reporters that the report was officially awaited in mid-April but was deferred partially because of the changes to the criteria used to evaluate countries.
The U.S. Dollar Index that tracks the greenback versus a basket of other currencies was slightly changed at 97.805.
The dollar received some support overnight after the Conference Board’s consumer confidence index for May increased to 134.1 from 129.2 in April.
The NZD/USD pair edged up 0.1 percent to 0.6544.
New Zealand business sentiment survey showed a net 32 percent of respondents anticipated the economy to get worse. That compared with a 37.5 percent pessimism level in the preceding poll in April.
The AUD/USD pair also climbed 0.1 percent to 0.6929.
The USD/JPY pair was slightly changed at 109.31.