The USD has not had a good quarter – political scandal, diplomatic fallouts, questionable Presidential statements, mixed economic data, a conservative Fed monetary policy and multiple Trump administration resignations and dismissals (almost reaching twenty since the beginning of Trump’s inauguration) – have all contributed to the currency’s continued volatility.
Markets have been dancing the risk-on/risk-off tango with the dollar for months – but today with the announcement of a new N. Korean missile launch, which actually flew over a US ally (both strategic, economic and industrial) Japan – the USD slipped to a four-month low.
Across it JPY, CHF (as a safe-havens) and EUR (as a much more stable major currency) grew – the Yen experiencing a small loss of 0.143% at the moment (trading at 0.0092) but overall grew 1.52% since the beginning of the month. CHF gained 0.231% trading at 1.0522 with monthly gains in the neighborhood of 1.55%. EUR seems to be growing at the moment gaining 0.236% (trading at 1.992) and has gained a observable 1.19% since the beginning of the month.
Although Hurricane Harvey was down-graded from a hurricane to a tropical storm – the extremely inclement weather is causing a loss of more than half a million barrels a day in production. And analysts around the world are speculating that a drop in production of this scale will inevitably have long-term effects on the market at large.
While all of these substantial events are happening, markets are holding their breath (and looking to Twitter) for any Trump statements that might further increase frictions between the US and N. Korea – pushing the dollar down
further.
This article comprises the personal view and opinion of the STO Investment Research Desk and at no time should be construed as Investment Advice.