Risk off continues as Middle East tensions escalate

Jan 06 04:01 2020 Print This Article

 

Equities extend Friday’s losses

The war of words (so far) between the US and Iran escalated at the weekend, and this has taken its toll on global equity markets at the start of this week. US indices extended Friday’s losses by between 0.39% and 0.44% while the Australia200 index was the under-performer of the session with losses of 0.48%. Japanese markets re-opened after an extended New Year holiday with losses of 0.30%.

In contrast, currency markets were relatively calm with the Japanese yen out-performing amid safe haven demand. USD/JPY fell for a sixth consecutive day, the longest stretch since December 2018, dropping 0.12% to 107.98. The pair opened below the 100-day moving average this morning, the first time since October 9.

 

USD/JPY Daily Chart

Source: OANDA fxTrade

 

Other currency pairs were mixed but little-changed, with EUR/USD up 0.07% at 1.1166, GBP/USD up 0.06% at 1.3087 and AUD/USD slipping 0.02% to 0.6946. Oil prices jumped on supply disruption possibilities, with WTI surging to the highest in more than eight months.

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