Kantox currency update: Yen surges as tensions in North Korea escalate
The dollar traded lower on Tuesday for the second consecutive day, as the safe-haven yen gains traction in a general context of risk aversion, with investors wary about the consequences of the growing geopolitical tensions on the Korean peninsula.
In the macroeconomic calendar, today the main focus will be in the UK, with the ILO unemployment data, but above all, with Carney’s speech at the International FinTech Conference, whose comments about the Bank’s monetary policy will be closely analysed.
EUR/USD holds above 1.0600. The euro ticked up on Tuesday, favoured by broad-based dollar weakness, and extended its recovery from Friday’s lows at 1.0570 to session highs at 1.0630. At London market opening times, the EUR/USD is trading at 1.0615.
GBP/USD: back to 1.2500 area. The pound advanced on Tuesday for the second consecutive day to retrace Friday’s sell off and return to levels right below 1.2500. At London market opening times, the GBP/USD is trading at 1.2485.
USD/JPY: breaks below 110.00. The dollar fell sharply against the yen on Tuesday, breaking below the 110.00 psychological support level, to hit its lowest levels in almost five months at 109.35, weighed by growing fears about a U.S. military action in North Korea. At London market opening times, the USD/JPY is trading at 109.55.
In the Calendar Today
At 08:00 GMT We will be attentive BoE Carney’s speech. His comments about the Banks monetary policy outlook and UK economic perspective right ahead of the start of the Brexit negotiations might have an impact on the pound.
At 08:30 GMT the focus will be on the UK ILO unemployment reading. Unemployment in the UK has remained resilient to Brexit uncertainty and remains at its lowest levels in more than 40 years. Unless there is a negative surprise here, this indicator will be neutral to positive for the pound.
08:00 GMT BoE: Carney’s speech
08:30 GMT UK: ILO Unemployment Rate (3M) (Feb)
Prev: 4.7% Cons: 4.7%