FOREX-Dollar edges up on rising U.S.-China tension; yuan, other Asian FX fall

* Graphic: World FX rates in 2020 https://tmsnrt.rs/2RBWI5E
* U.S.-China standoff undermines sentiment
* Dollar and yen supported as a safe-havens
* Yuan briefly hit 1-1/2 month low
* New Zealand ponders helicopter money

By Stanley White
TOKYO, May 22 (Reuters) - The dollar gained against major
peers on Friday as worries about rising diplomatic tensions
between the United States and China supported safe-haven demand
for the greenback.
Sino-U.S. relations have soured over a broad range of
issues, including China's treatment of the former British colony
of Hong Kong and its response to the coronavirus pandemic, which
is causing risk aversion to spread.
The fresh geopolitical strains also boosted the safe-haven
yen but sent the yuan to a 1-1/2 month low and rattled both the
Australian and New Zealand dollars.
"There have been problems between the United States and
China for quite a while now," said Yukio Ishizuki, FX strategist
at Daiwa Securities in Tokyo.
"Some very short-term players are changing positions from
one day to the next, which makes it difficult to see the trend,
but overall the dollar looks to be supported."
While the new frictions added some pressures to the yuan,
the Chinese currency also found some support after policymakers
in Beijing unveiled new stimulus measures, as widely
expected. The dollar rose 0.24% to $1.0925 per euro EUR=EBS on
Friday, following a 0.3% increase in the previous session.
The dollar bought 0.9715 Swiss franc CHF=EBS after posting
its biggest gain in more than two weeks on Thursday.
Sterling GBP=D3 held steady at $1.2216 before data later
on Friday expected to show a plunge in British retail sales.
China is set to impose new national security legislation on
Hong Kong after last year's pro-democracy unrest, a Chinese
official said on Thursday, risking fresh protests in the city.
U.S. President Donald Trump has warned that Washington would
react "very strongly" to the legislation.
There is a risk that Hong Kong could lose some of its
favourable U.S. trading terms that have helped it maintain its
position as a global financial centre.
The Hong Kong dollar HKD=D3 was little changed on Friday
near the top end of its narrow 7.75-7.85 band against the
greenback. Shares in Hong Kong .HSI tumbled more than 5%,
highlighting investors' concerns.
Washington and Beijing are also at loggerheads over Chinese
companies' access to advanced technology and criticism of
Beijing's response after the novel coronavirus emerged late last
year in the central Chinese province of Hubei.
The tension has stirred memories of last year's drawn-out
trade war between the two economic superpowers, which roiled
global financial markets.
Onshore, the yuan CNY=CFXS briefly fell to the lowest
since April 2 before paring losses to trade at 7.1210 against
the dollar.
Chinese Premier Li Keqiang pledged higher infrastructure
spending and other measures to support the economy at the
National People's Congress on Friday. China did not issue a growth target for 2020, the first time
since it began publishing such goals in 1990, as the world's
second-largest economy reels from the coronavirus.
The antipodean currencies nursed losses as risk sentiment
took a blow.
The Australian dollar AUD=D3 fell 0.49% to $0.6535. Across
the Tasman Sea, the New Zealand dollar NZD=D3 eased to
$0.6106.
New Zealand is considering distributing cash directly to
households to help the economy recover from the coronavirus
pandemic, the country's finance minister said on Friday.
The idea of direct cash transfers to households, sometimes
called helicopter money, is drawing attention as the pandemic
inflicts the worst blow to the global economy since the Great
Depression in the 1930s.
Elsewhere, the yen JPY=EBS edged up to 107.46 per against
the greenback. Japan's currency also rose 0.6% against the
Aussie AUDJPY= and gained 0.4% against the kiwi due to
safe-haven inflows.
The yen did not budge earlier in the Asian session when the
Bank of Japan decided the details of a lending scheme for small
companies hurt by the pandemic at an emergency meeting on
Friday.