Richard Perry
Independent Analyst
There was a real sense of concern that took over Wall Street last night that has driven a flight into safer haven plays. As the durable goods orders disappointed there is a fear is that the strength of the dollar will negatively impact through to corporates revenues and earnings. Additionally there was news that in the Middle East, Saudi Arabia was beginning military operations in Yemen which sent the oil price sharply higher. This has all driven demand for safe haven instruments such as the yen, and gold. Wall Street sold off significantly with the S&P 500 down by 1.5%. The strengthening yen has also had an impact on the Nikkei 225 which was also down 1.5% overnight. European markets have begun the day in negative territory too.
Forex trading shows that majors having been fairly settled during Asian trading (with the exception of the stronger yen) are now beginning to show dollar weakness is on the brink of continuing again. This is reflective of the flight into safer haven trades. However, despite a strong rebound being seen in oil, the commodity currencies have been struggling to gain traction which again could be reflective of reduced risk sentiment.
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