The US dollar rose on Friday, to continue its recovery for the second straight day from a two-week low, on investors' risk-aversion and demand for the US currency as the best alternative investments, amid the escalation of the US-China tensions over Hong Kong.

The dollar index rose 0.45% to 99.87 points, after opening at 99.82, and hit an intraday low of 99.39.

The greenback gained 0.3% yesterday, its second daily, first gain in four days, within recovery attempts from the 2-week low of 99.00 points.

A Chinese official said that the Chinese government plans for a new national security law in Hong Kong, which led US President Donald Trump to say that the US would respond "very strongly".

These developments in the US-China relations drove investors to focus on safe haven assets, led by the US dollar, which has been recently receiving safe-haven demand after the closure of the global economy due to the coronavirus pandemic.

Oil prices continued to fall on Friday, as the US crude lost more than 9% and Brent crude fell 6%, pulling back form 10-week highs for the first time in three days, on profit taking and renewed worries over the coronavirus impact, after China China abandoned setting a target for GDP growth, and escalating geopolitical tensions between the US and China.

The US crude (WTI) fell 9.2% to $30.73 a barrel, after opening at $33.85 today, with a high of $33.98, and Brent fell 6.3% to $33.86, after opening at $36.15, with a high of $36.22.

Yesterday, the US crude gained 1.1%, and hit a 10-week high of $34.64 a barrel, and Brent futures rose 0.5%, and hit the highest since March 11 of $36.96.

These gains came as fears over the US oversupply receded after data showed a drop in the US crude inventories fell the most in 2020 and the production levels fell for the seventh straight week.

The Chinese authorities decided on Friday to not set a specific target for economic growth this year, which renewed concerns about the Covid-19 pandemic impact and a drop in fuel demand.

Oil prices are also weighed down by the escalation of the US-China tensions, which threatens a deterioration of the trade relations between the two sides after signing of the first phase of their trade deal.

A Chinese official said that the Chinese government plans for a new national security law in Hong Kong, which led US President Donald Trump to say that the US would respond "very strongly".

Baker Hughes will also reveal later today its count for the US rigs working in shale oilfields, as it fell by 34 rigs to 258 in the previous week, which is the lowest since July 2009.

Gold prices rose on Friday, to resume gains after pausing yesterday on profit-taking, as today safe haven demand rebounded, due to escalating geopolitical tensions between the US and China.

Gold prices rose 0.8% to $1,740.09, while yesterday gold lost 1.1%, the first daily loss on profit taking from 8-year high of $1,765.09.

Alongside profit taking, gold prices fell yesterday after unexpected strong manufacturing sector in Europe and the US in May, thanks to easing the coronavirus lockdown measures.

Today, safe-haven demand has renewed for gold, on risk-aversion due to the escalation of the US-China tensions over Hong Kong.

A Chinese official said that the Chinese government plans for a new national security law in Hong Kong, which led US President Donald Trump to say that the US would respond "very strongly".

Gold stocks at the SPDR ETF  remained unchanged yesterday, with the total at 1,112.32 metric tonnes.

At 08:00 GMT, the British economy released the monthly retail sales reading for April, which fell by 18.1%, the lowest reading since the data was first collected, lower than forecasts of -15.8%, and lower than the previous reading of -5.1%. This data is negative for the sterling pound.