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Risk Aversion Intensifies, GBP Rebounds After Johnson’s Brexit Offer


Global stock indices continued to slide on Wednesday and during the Asian morning Thursday, following headlines that the US will impose tariffs on USD 7.5bn worth of goods imported from the EU. Although the yen was the top-performer among the G10 currencies, the Swiss franc failed to attract haven flows, perhaps due to the lower-than-expected inflation numbers from Switzerland. In the UK, PM Boris Johnson presented his Brexit plan, deviating very little from yesterday’s rumors, something that allowed some short covering in the pound.

Equities Continue to Slide as US Announces Tariffs on EU Goods

The dollar traded mixed against the other G10 currencies on Wednesday and during the Asian morning Thursday. It gained against CAD, CHF and slightly against SEK, while it underperformed versus JPY, NZD, EUR, and GBP in that order. The greenback traded virtually unchanged against AUD and NOK.

Although not so clear by the overall performance in the FX sphere, the strengthening of the yen suggests another round of risk aversion. Indeed, major global equity indices continued...

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Source: https://www.jfdbank.com/en/research/risk-aversion-intensifies-gbp-rebounds-after-johnsons-brexit-offer-20191003
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