Yen dropped amid growing geo-political worries

Yen dropped, Swiss franc gained amid growing geo-political worries

Yen, Swiss France, Sterling and Euro trending points

  • Yen, Asian & emerging market currencies dropped amid growing tension between India & Pakistan again on Kashmir border issue
  • Swiss Franc gains as Trump-Kim summit slashed short
  • Sterling slightly eased gains, residing closer to $1.33 despite a stronger-than-anticipate US fourth quarter GDP
  • Euro remains accordant, tested a 4-week high at 1.1420 in the intra-day trading

Asian currencies fell, safe-haven Swiss franc gained amid uncertainties over geo-political worries

The safe-haven Swiss Franc gained slightly on Thursday, the 28thof February, after United States and North Korean had failed to reach an accord on denuclearization of North Korean, as Trump found Kim’s claims too much harsh to be considered. Following the dispute between the two leaders, Trump and Kim had also cancelled their lunch and Trump walked away from Kim, since Kim appeared to have pressing US on sanctions without offering much on cancelling their ballistic missile and nuclear programs.

After reveal of a failed talk between Kim-Trump in Vietnam, the risk currencies alongside Asian currencies drooled heavily. The Japanese yen also lost its safe-haven appeal following the disagreement between the two leaders and in the wake of raising tensions between India and Pakistan again over Kashmir issue. Internationally, the recent conflict had surged intense concerns, as this is the first time two nuclear-weapon-rich countries had engaged in a battle and the Indian aircrafts had breached the Pakistan border for the first time since 1971.

Over growing tension between two nuclear weapon rich countries, the appeal of safe-haven currencies increased and the Swiss Franc had risen over 0.3 percent against the American dollar to 0.9979. Alongside, the Australian dollar dropped more than 0.1 percent to $7130, after White House Trade Representative Robert Lighthizer told yesterday (the 27thof February) that the Chinese delegates seemed to be more discordant over purchasing new US goods instead focusing on critical issues such as forced IP transfer alongside, a structural reform in the Chinese economy, indicating that the trade abrasions may not be healed in a near-term outlook.

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USD/JPY daily price chart

USD/JPY daily price chart

USD/CHF daily price chart

USD/CHF daily price chart

Besides, the emerging market currencies and stocks in India-Pakistan region and gulfs would likely to falter following rising tensions between India-Pakistan, which might as well have turned in to a long-lasting border dispute ahead of an Indian election, where a war would likely to help Indian PM Modi to raise more supports and Pakistani PM Imran Khan seemed quite unable to handle his military resources after borrowing 10 billion American dollar from IMF on Saudi lobbying and American backing.

Bottom Line

In a near-term outlook, the USD may not be holding forth against the Japanese Yen despite a better-than-anticipated GDP growth in the fourth quarter of the last year, as the risk-haven appeal for Japanese Yen had not yet been wiped out entirely.

Meanwhile, amid turbulence over the geo-political issues, the Swiss Franc would likely to enhance gains, alongside Great Britain pound and Euro. Among the commodities, the crude oil would likely to extend gains, as the Saudi Energy Minister had replied a recent Trump’s tweet, calling OPEC not to hike price too fast, saying that the OPEC was doing everything they could do to balance the crude oil market. Following the release of Saudi energy minister’s comment, UK and US crude surged over 0.5 and 1 percent respectively.

Besides, the emerging market currencies and stocks in Asia minor, China and gulfs would likely to falter following rising tensions between India-Pakistan and disdainful comments regarding trade talks from US Trade Representative Lighthizer.

Read more on Japanese Yen here

[Disclaimer: The content of this article is personal opinion and should not be considered as investment advice or suggestion towards any trading activity.]


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