The U.S. Dollar is crushing all counterparts as 2019 is bringing on a major wave of insecurity across global markets.
As you may have predicted, this line will indeed mention that the Japanese Yen is the one exception to the greenback’s rally as its safe-haven status in the midst of such chaotic times for trading is lifting it tremendously. Indeed, during the “witching hour” yesterday, the time between markets closing in New York and opening in Tokyo, the dollar experienced a flash crash against Yen. The 4.0% slide for the dollar helped the Yen reach its highest value since April 20th.
Trade issues remaining unresolved will continue this trend, but this may come to an end. Part of what may responsible for the slide in stocks and such appreciation for Yen is that Apple, Inc. downgraded its outlook, referring to China’s slowdown and tariff uncertainty as ongoing concerns. A new congress is also set to come in today and there will be pressure to resolve the China-tariff-war uncertainty.
What to Watch Today…
- ISM Manufacturing Index 10AM
- Construction Spending 10AM
The complete economic calendar can be found here.
The Euro declined further as the swings in markets keep it flowing back and forth within a 70-point range. Ever since the shared currency sank to its lowest levels against the buck in over fifteen months back in December, it has mostly stayed within those figures.
Even good data for the region is not helping after the Euro-zone Manufacturing Purchasing Managers Index showed the expected expansion. Nevertheless, some investors are interpreting the data as just evidence of a slowdown that could have recessionary repercussions if it continues. Inflationary figures in the form of Consumer Price Index will be released tomorrow.
The Yen is trading at its best levels since April 2018 after yet another big hit to equities around the globe overnight. The worrisome announcement by Apple followed by awful manufacturing gauges in Asia are signs that trade flows have been compromised after the 20128 impasse, which may also bring authorities to the table such as the Chinese government and the World Trade Organization.
No news from Japan, the Nintendo Switch is a hit, but the “flash appreciation” was not due to it, but rather to the question: can the factories responsible for making various parts and finalized products, as well as freight forwarders, stay in business?