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.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
More View more
Real Time News
  • The New Zealand Dollar’s bullish breakout attempt in early-September was rebuffed. Price action at the end of the month is telling a different story. Get your market update from @CVecchioFX here:https://t.co/AquMSrssne https://t.co/DtFuFfrS7Q
  • So much for that Evergrande recovery. Shares of the troubled Chinese property developer are down approximately -12% today following yesterday's impressive rally (biggest in a year) https://t.co/Nome25d9Bt
  • Retail trading platform Robinhood announces hire of new Chief Compliance Officer amid regulatory scrutiny
  • There is a ridiculous number of scheduled Fed speeches on the docket next week. Powell specifically will be speaking multiple times including at an ECB hosted forum on central banking (which also has a panel with Fed, ECB, BOE and BOJ heads)
  • USD Ascending Triangle, Bullish for Q4 - #DXY chart on @TradingView https://t.co/iCnRSo9N4V
  • Credit rating agency Standard & Poor's is due to give its sovereign credit rating update on Germany today ahead of weekend national elections
  • RT @BIS_org: Since the early 1990s, changes in the #MonetaryPolicy stance have affected a rather narrow set of prices – mostly in the servi…
  • Huawei's CFO Meng Wanzhou reached deal with the US Dept of Justice to return her to China - Dow Jones
  • Cleveland Fed President Loretta Mester says: - sees US GDP in 2022 between 3.75 and 4% - Supports tapering in November and concluding over the first half of 2022 - After liftoff, accommodative policy needed for some time
  • Fed Chairman Jerome Powell doesn't comment on the growth forecast or monetary policy in his introductory remarks
Gold Loses Safe Haven Appeal as Trade War Boosts JPY, CHF, EUR

Gold Loses Safe Haven Appeal as Trade War Boosts JPY, CHF, EUR

Martin Essex, MSTA, Analyst

Trade war news and analysis:

- The US China trade war continues to prompt demand for safe havens, with flows into the Japanese Yen, the Swiss Franc and the Euro.

- However, one traditional safe haven, Gold, is singularly failing to benefit.

Check out the IG Client Sentiment data to help you trade profitably.

Trade war continues to damage market confidence

The prospect of a US trade war with China, the European Union and others continues to prompt flows into assets seen as safe havens at times of market turmoil. That is again boosting two of the traditional havens: the Japanese Yen and the Swiss Franc. However, the Euro seems to be joining the haven ranks at the expense of Gold, which is seeing little demand.

The latest trade war developments are still worrying the markets, including proposed restrictions on foreign investment in US technology companies and a warning by Harley-Davidson that it would focus on shifting some US production to other countries.

As to be expected, that has boosted the Japanese Yen and the Swiss Franc, with USDJPY falling to its lowest level since June 11 and USDCHF to its weakest since June 14. Unusually though, the Euro is strengthening too, with the single currency increasingly seen as an alternative haven. In Asia Tuesday, EURUSD reached its highest level since its sharp fall on June 14, when European Central Bank President Mario Draghi signaled the end of ECB asset purchases in December.

EURUSD Price Chart, One Hour Timeframe (June 14-26, 2018)

Latest EURUSD price chart.

Chart by IG

That Euro strength has come despite US President Donald Trump threatening tariffs on EU car imports. Surprisingly, though, there has been no similar strengthening of the Gold price, with the precious metal currently trading at its weakest so far this year.

Gold Price Chart, Daily Timeframe (November 24, 2017 – June 26, 2018)

Latest gold price chart.

Chart by IG

For traders looking for safe assets therefore, Gold appears to be losing its shine, and may continue to do so even if the trade war intensifies further.

More to read on trade wars

China’s Position and Stakes in the Growing Trade War with the US

DAX Price Analysis - Trump’s Trade Wars Pummel Valuations

Resources to help you trade the forex markets

Whether you are a new or an experienced trader, at DailyFX we have many resources to help you: analytical and educational webinars hosted several times per day, trading guides to help you improve your trading performance, and one specifically for those who are new to forex. You can learn how to trade like an expert by reading our guide to the Traits of Successful Traders.

--- Written by Martin Essex, Analyst and Editor

Feel free to contact me via the comments section below, via email at martin.essex@ig.com or on Twitter @MartinSEssex

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

DISCLOSURES