Early on Friday, the US dollar is trading cautious, stuck in a tight range, as markets await US President Donald Trump’s response to China’s passing of the national security bill on Hong Kong. At the time of writing, the US dollar index DXY is trading around 98.37.

Earlier this week, Trump had threatened that he would announce retaliatory measures against China if it passed the legislation, which are sure to increase tensions between the two world leaders. On Thursday, the Chinese parliament approved this legislation and in response, Trump has announced that he would be revealing his plans via a news conference today.

Even though the prospect of US-China tensions keeps its safe haven appeal supported, the US dollar is set to post a weekly loss so far as traders moved towards riskier currencies over rising optimism about economies reopening and the recently announced stimulus measures in Europe.

Commodity currencies like the AUD and NZD are set for weekly gains against the US dollar as both Australia and New Zealand resumed economic activity after successfully controlling the pandemic across their regions. Meanwhile, the Euro looks all set for the second consecutive weekly gain against the dollar, buoyed by reports about the setting up of a 750 billion euro recovery fund.