INVESTORS MOVE INTO SAFE HAVEN ASSETS AS U.S AND NORTH KOREAN TENSIONS INTENSIFY
SAFE HAVENS IN DEMAND
Investors moved into safe haven asset classes this week, as rhetoric between the United States and North Korea heightened to new levels. The threat of possible armed retaliation drove investors into the safety of the Japanese Yen, Swiss franc, and gold.
The Japanese Yen moved towards the 109 level, whilst the Swiss franc moved sharply higher against the U.S dollar and the euro. Gold also moved to its highest level in over two months, with the price of gold trading to $1,285.00 an ounce.
RBNZ TURNING DOVISH
The Reserve Bank of New Zealand left the official cash rate at 1.75 per cent, with the Reserve Bank also indicating that the rising value of the kiwi is creating problems for the domestic economy.
The New Zealand dollar fell towards the $0.7250 cents level against the greenback, as Reserve Bank of New Zealand policy makers released a more dovish than expected July policy statement.
RECORD U.S JOB OPENINGS
The JOLTs job opening number of openings came in at a record high 6.2 million during July, the U.S Labor Department said. The much better than expected jobs opening figures provoked strong buying interest in the U.S dollar.
The initial market reaction saw the Euro falling below its 200-week moving average, touching just below the 1.1700 level. Whilst Sterling continued to lose ground, moving below the psychological 1.3000 level, hitting a two-week trading low against the greenback.
U.S INFLATION DROPS
United States producer prices unexpectedly fell into negative territory for the month of July, recording U.S PPI's biggest drop in nearly a year.
The U.S producer price index fell 0.1 percent for the month of July, reversing the 0.1 percent rise seen in June. PPI is a key metric of inflation the Federal Reserve watches to measure inflation and may influence the FED's future monetary policy decisions.