CHF/JPY soared to its highest levels since December of 2018 in early trading on Thursday. The CHF/JPY currency cross (a pair that does not include the US dollar) is made up of two major financial safe-havens.
The Swiss franc reached long term highs against its major rivals after Switzerland was added to the US Treasury’s watch list of currency manipulators on Monday. The Swiss National Bank (SNB) has previously bought large quantities of foreign currencies to contain demand for the franc.
The inclusion in the US Treasury watch list may discourage the SNB from intervening to attempt to limit further appreciation of the franc. The SNB said that interventions are “not aimed at conferring advantages on Switzerland by undervaluing the franc.”
Meanwhile, the Japanese yen fell to its lowest levels in 8 months this week after Washington removed China from its list of of currency manipulators, fueling risk-on sentiment in the market. The yen was also pressured by dampened safe-haven demand after tensions between the US and Iran cooled and the US and China signed a long-awaited trade deal on Wednesday.
The ‘phase one’ deal between the world's largest economic powers reduced some US tariffs on Chinese goods in exchange for a commitment from China to purchase more American agricultural, energy and manufactured goods. Additionally, the deal included provisions on intellectual property enforcement and protections. Analysts have suggested that there may be little progress on 'phase two' talks before the US presidential election in November.
The markets cheered the trade deal news with major US stock indices reaching record highs on Wednesday. The Dow Jones Industrial Average closed above 29k for the first time and broader S&P 500 index also closed in record territory. Investors now look to the US retail sales report due for release later on Thursday for further insight into the health of the US economy.
Trading Futures, Options on Futures, and Foreign Exchange involves substantial risk of loss and may not be suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.
Recommended Content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.