US Senate backs legislation requiring companies to report investment in China semiconductors, AI
Early Wednesday morning in Asia, Reuters reports that US 100-member Senate backed the amendment to the National Defense Authorization Act (NDAA) by 91 to 6. This means that the policymakers back legislation requiring US companies to report investment in China technologies like semiconductors and artificial intelligence (AI).
The news also mentioned that the NDAA is expected to become law later in the year and is a version of the Outbound Investment Transparency Act, offered by Democratic Senator Bob Casey and Republican John Cornyn to address the risks of U.S. investment going to foreign adversaries like China, per Reuters.
It should be noted that the latest NDAA amendment is a lighter version of the US Senate measures agreed in 2021 which failed to become law and were considered too rigid, suggesting brighter odds of the legislation reaching US President Joe Biden’s desk for signing and being a law.
Market reaction
Although the stated legislation is still a bit far from being the law, the news prods the previous risk-on mood and probes the risk-barometer AUD/USD pair near 0.6790, especially ahead of the cautious mood before the Federal Open Market Committee (FOMC) monetary policy meeting announcements.
Also read: AUD/USD Price Analysis: Holds gains but struggles at 0.6800, ahead of FOMC’s decision