Skip to Content
News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

Free Trading Guides
Subscribe
Please try again
Select

Live Webinar Events

0

Economic Calendar Events

0

Notify me about

Live Webinar Events
Economic Calendar Events

H

High

M

Medium

L

Low
More View More
Risk Aversion Continues in Europe as US, North Korea Go Head to Head

Risk Aversion Continues in Europe as US, North Korea Go Head to Head

Talking Points

- Safe havens such as the Japanese Yen and gold are in demand on the bellicose rhetoric from the US and North Korea.

- Conversely, ‘risk-on’ currencies like the Australian Dollar and the Korean Won are weakening.

Check out our new Trading Guides: they’re free and have been updated for the third quarter of 2017

Investors were moving their money from riskier assets such as stocks into perceived safe havens such as US and German government bonds Wednesday as President Donald Trump warned North Korea of “fire and fury” if it threatened the US and North Korea said it is examining a missile strike on the US Pacific territory of Guam.

In the currency markets similarly, the risk-off tone benefited the Japanese Yen and Swiss Franc while weakening the Australian Dollar and Korean Won. Gold, the traditional bolthole for risk-averse investors, benefited too.

All three major European stock markets were lower by mid-morning in London, with the FTSE 100 down 0.8%, the DAX 1.2% lower and the CAC 40 off by 1.5%. The yields on the 10-year US Treasury note and the 10-year German Bund were both down by around four basis points. In the foreign exchanges, the Japanese Yen was a beneficiary despite its geographical proximity to the danger zone.

Chart: USD/JPY 5-Minute Timeframe (August 9, 2017)

Chart by IG

It was a similar picture for the Swiss Franc and gold, while the Korean Won – South Korea’s currency – and the Australian Dollar both weakened.

Chart: AUD/ USD 5-Minute Timeframe (August 9, 2017)

Chart by IG

--- Written by Martin Essex, Analyst and Editor

To contact Martin, email him at martin.essex@ig.com

Follow Martin on Twitter @MartinSEssex

For help to trade profitably, check out the IG Client Sentiment data

And you can learn more by listening to our regular trading webinars; here’s a list of what’s coming up

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES