Investors flock over the Japanese yen as President Donald Trump continues to stir political fickleness; Swiss franc was also hitting a seven-week against the greenback. The dollar hits a six-month low just after the bell rings for the Wednesday market against a basket of major currencies. Asian stocks also slump against the continued surge that the yen is sitting on.
The dollar index was down by 0.62% at 98.19; hitting a new low after November 9’s slump. The dollar index peaked at 103.82 last January 3 after Trump’s planned tax reform. Manuel Oliveri of Credit Agricole said that "On the back of increased uncertainty when it comes to Trump, global risk sentiment has turned a little more unstable," he also said that "But from a broader angle we are nowhere close to
Yen’s Fantastic Week So Far
The Japanese currency has been experiencing a massive cascade as the dollar struggles this week because of two main reasons; the first one is the lackluster US data on the beginning of the week, the most recent one is the report of President Trump disclosing “classified intelligence” to Russian officials who visited the White House last week . The news broke and investors were afraid of the damage and scandal that entails the new administration made.
Currently, the yen has increased by 0.7% to 112.26 yen per dollar, this figure tramples May 5’s exceptional increase. According to FX research firm Global-info Co. director Kane Ogino in Tokyo "Investors need to see if he (Trump) can carry out all of his original ideas, compromise, and get organized,”; while senior trader at OANDA, Stephen Innes said, "Investors are deeply concerned that all the political noise will morph into economic risk as the political back-fence talk, speculation and dirty laundry could detract from Trump's key agenda: Tax reform,"
Asian Stocks Remains under Pressure
Yen’s dominant market performance has been pushing Asian stocks to the brink, Hong Kong’s Hang Seng Index suffered a loss of about 0.19%, while the mainland stock, Shanghai Composite loses 0.26% at 3104.74 at 8.22 points; on the other hand, the Shenzhen Composite was surprisingly up by 0.13% at 1867.68 or 2.42 points.
Japan’s Nikkei suffered a massive loss of about 0.53% to end at 19,814.88, or 104.94 points. The stock suffered the most as the yen has become the safe-haven for investors on looming potentials of geopolitical conflicts. Australia’s S&P/ASX 200 also suffered some decline of 1.10% at 5786.00 or 64.52 points. South Korea’s Kospi also extends its losses from geopolitical tremors from North Korea’s nuclear exercise; it manages to shed 0.15% at 2291.53, or 3.52 points.
The US administration continues to weigh down the greenback with Trump’s bold statements, while Asian stocks remain under enormous constraint from geopolitical conflicts brought by the nuclear activity and investors looking to yen as their safe-haven.
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