Forex today: North Korea tensions drive flows into safe havens
Forex today was in risk off mode due to the North Korean angst.
The usual risk-off market reactions played out, with flows going into the safe havens and away from higher beta and riskier investments. CHF, JPY and US treasuries picked up the bid and stocks fell away from yesterday's record highs in the benchmarks.
The yen was firm but tailed off later in the US session with defence secretary Mattis putting on a stern stance against North Korea. The appearance of Secretary of State Tillerson in Guam earlier on softened the Yen's punch as well. USD/JPY trades just below the 110 handle heading towards the close having fallen from 110.32 the high down to 109.55 the low. Gold kept up the bid from $1,258 to $1,278 the high.
Sterling and the euro were sliding lower in the US session on a bid dollar yen and CHF in the crosses driving the risk-off price action. Sterling lost its M&A London bid from 1.3030 to 1.2968 lows before a minor recovery back to 1.30 the figure. The euro dropped to 1.1688 from 1.1764. US yields were down -0.79% in the ten years and the DXY was down -0.11% at 93.54. Iron ore was up and copper was down. AUD closed down - 0.34% and Kiwi up +0.05% ahead of today's RBNZ.
Key events ahead (GMT):
21:00: RBNZ interest rate decision and statement. RBNZ to hold at 1.75%
Key notes from US session:
- Gold: steepest daily rise since mid-May
- US congresswoman confident Guam protected from N. Korea threat - RTRS
- When is the RBNZ and how could it affect NZD/USD?