logo
Share SHARE
FONT-SIZE Plus   Neg

Dollar Drops Against Yen As Investors Flock To Safe Havens

USD-JPY-090517-lt.jpg

The risk appetite among investors is decreasing today as geopolitical concerns have again returned to the forefront. The dollar is losing ground against all of its major rivals Tuesday afternoon, but it is especially weak against the Japanese Yen. Traders are looking to hide in safe havens like the Yen and gold as tensions between the United States and North Korea have flared again.

North Korea successfully tested a hydrogen bomb over the weekend, which has put traders in a nervous mood. President Donald Trump condemned the nuclear test, saying North Korea's words and actions continue to be very hostile and dangerous to the U.S. Trump said the U.S. is considering stopping all trade with any country doing business with North Korea in response to the test.

After reporting a substantial increase in new orders for U.S. manufactured goods in the previous month, the Commerce Department released a report on Tuesday showing a sharp pullback in factory orders in the month of July.

The Commerce Department said factory orders plunged by 3.3 percent in July after surging up by an upwardly revised 3.2 percent in June. Economists had expected orders to tumble by 3.2 percent compared to the 3.0 percent jump originally reported for the previous month.

The dollar dropped to a low of $1.1940 against the Euro Tuesday, but has since rebounded to around $1.19.

Eurozone retail sales declined in July due to a fall in food sales, data from Eurostat showed Tuesday. Retail sales volume decreased 0.3 percent month-on-month in July, partially offsetting June's 0.6 percent increase. The pace of decline matched economists' expectations.

Eurozone private sector logged steady growth in August, final data from IHS Markit showed Tuesday. The composite output index came in at 55.7 in August, matching July's reading but down slightly from the flash estimate of 55.8.

The buck has fallen to a 3-week low of $1.3015 against the pound sterling this afternoon, from an early high of $1.2905.

The British service sector expanded at the slowest pace in almost a year in August as subdued client demand and heightened uncertainty about the domestic economic outlook weighed on business activity.

The services Purchasing Managers' Index fell more-than-expected to 53.2 in August from 53.8 in July, survey data from IHS Markit and the Chartered Institute of Procurement & Supply showed Tuesday. The expected reading was 53.5.

Like-for-like sales in the United Kingdom climbed 1.3 percent on year in August, the British Retail Consortium said on Tuesday, accelerating from the 0.9 percent increase in July. Food sales remained firm, advancing an annual 3.2 percent, slowing from 3.4 percent in the previous month.

The greenback reached an early high of Y109.931 against the Japanese Yen Tuesday, but has since retreated to around Y108.825.

The services sector in Japan continued to expand in August, although at a slower pace, the latest survey from Nikkei showed on Tuesday with a Services PMI score of 51.6. That's down from 52.0 in July, although it remains well above the boom-or-bust line of 50 that separates expansion from contraction.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Market Analysis

comments powered by Disqus
Follow RTT