The dollar traded unchanged or lower against
most of its G10 peers during the European morning Friday in the absence of
major economic events. It was lower against NOK, SEK, AUD and GBP, in that
order, while it was higher against JPY. The greenback was virtually unchanged
against CAD, CHF, NZD and EUR.
On Friday, during the European morning
non-economic events were the main market drivers. The crash of a Malaysia
Airlines plane in eastern Ukraine on Thursday increased tensions between Russia
and the West. Risk aversion among investors was further increased after the
Israel military began ground attacks against Palestinian militants in the Gaza
strip. Nevertheless, the impact of the events seems to have diminished as the
safe-haven assets gave away most of their gains and returned to their
yesterday’s pre-crash levels.
USD/JPY fell almost 0.20% amid the news of
the plane crash and weakened further in the following hours reaching one week
low at 101.09. The fading of the events however reversed the pair’s loses and
it advanced to the 101.40 level at the time of writing.
Gold followed a similar pattern to yen as a
safe-haven asset. The precious metal jumped approximately +1.70% following the
news of the Malaysian jet crash but gave away some of its gains as soon as the
events’ uncertainty weakened. The trend of the commodity confirmed my view that
some of the “risk off” trades that were put on yesterday were likely to be
reversed.
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