* U.S.-China tensions drive risk-off move

* Oil price fall hits commodity currencies
(Updates with latest currency moves)

By Saqib Iqbal Ahmed

NEW YORK, May 22 (Reuters) – The dollar rose against a
basket of currencies on Friday, helped by safe-haven demand as a
move by Beijing to impose a new security law on Hong Kong
further strained fast-deteriorating U.S.-China ties.

China on Friday unveiled details of its plan to impose a
national security law in Hong Kong that could see mainland
intelligence agencies set up bases in the global financial hub,
raising the prospect of more unrest there after last year’s
pro-democracy protests.

Reports of the law on Thursday drew fire from U.S. President
Donald Trump, sapping investors’ appetite for riskier assets and
driving the euro, offshore yuan and commodity currencies lower
on Friday.

Sino-American relations have worsened during the coronavirus
pandemic. The United States has ramped up its criticism of
China, blaming it for the spread of the virus, which originated
in the city of Wuhan in central China.

“It’s definitely a risk-off kind of day,” said Minh Trang,
senior FX trader at Silicon Valley Bank in Santa Clara,

“These types of headlines certainly give a little bit of a
jolt to the overall market, and you are seeing the result of
that today,” he said.

The U.S. Dollar Currency Index, which measures the
greenback’s strength against six other major currencies, was up
0.4% at 99.789. For the week, the index was down about 0.6%.

The euro slipped 0.5% against the greenback.

“Safe-haven dollar buying has been behind the move,” Ronald
Simpson, managing director, global currency analysis at Action
Economics, said in a note.

The offshore Chinese yuan hit a two-month low of 7.1645.
The onshore yuan hit eight-month lows.

The risk-sensitive Australian dollar was 0.5% lower against
the greenback while the New Zealand dollar fell 0.5%.

Sterling slipped 0.4% against the dollar as fresh data
showed British retail sales dropped by a record 18% as the
coronavirus crisis hammered the economy.

A drop in oil prices on Friday on rising U.S.-China tensions
and doubts about the pace of demand recovery from the
coronavirus crisis hurt the currencies of oil-producing nations.

The Canadian dollar weakened about 0.2% against its U.S.
counterpart as oil prices fell and Canadian data showed a record
decline in retail sales, with the loonie giving back some of
this week’s rally.

The Norwegian crown fell about 0.8% against the U.S. dollar

(Reporting by Saqib Iqbal Ahmed; Editing by Steve Orlofsky and
Paul Simao)