Today’s Key Market Drivers – 29th August 2017

The Japanese Yen and Swiss Franc suddenly gained around 7.00am AEST this morning as Japanese news agency NHK reported that North Korea had fired a missile and it had passed over the Tohoku region of Japan. CNBC reports this morning that the South Koreans said the missile was fired at approximately 5.57am local time. As I write this report at 7.41am AEST the story is developing and the Yen has gained against all its major rivals. Due to Australia’s close ties and proximity to Asia, the Aussie Dollar appears to have lost the most ground against the Yen. If it is true the missile passed over the top of Japan this could spark serious tensions and some sort of retaliation.

In other currency news the overall trends of the Euro going higher and US Dollar going lower continued on Monday following comments from ECB President Draghi and US Fed Chair Yellen on Friday in Jackson Hole. Draghi held back from saying the currency had strengthened too much and Janet Yellen failed to give traders any insight to when the next US Fed rate increase may be with traders now pricing in no more US rate increases in 2017. Hurricane Harvey a category 4 storm the most powerful US hurricane in 50 years unleashed 76 centimeters of rain and packed winds of over 130 miles an hour hitting the gulf coast of Texas. There is no doubt Harvey will impact the US economy financially in coming months with the damage bill to be in the tens of billions if not hundreds of billions as government disaster relief programs are enacted. Hurricane Harvey certainly didn’t inspire any heavy hitters to buy the US Dollar on Monday.

With the currency capital of the world, London having a public holiday on Monday traders will be hoping to see increased volatility today. With no high impacting news scheduled the volatility will likely be caused by geopolitical tensions surrounding this morning’s North Korean missile launch. Midnight tonight sees the release of US Consumer Confidence figures, which are unlikely to turn the tide for the US Dollar. I would suggest to you that financial markets today will remain in a risk off mood as Hedge Funds and Investment Banks digest North Korea’s latest missile launch and what action the rest of the world including the US, Japan and South Korea take.

 

About the Author: Andrew Barnett

Andrew is a professional trader and successful investor who has a strong focus on education. He is a regular Sky News Money Channel Guest and one of Australia’s most awarded and respected financial experts, and is regularly contacted by the Australian Media for the latest on what is happening with the Australian Dollar. Director at LTG GoldRock, Andrew Barnett, guides thousands of traders around the world in the live market on a daily basis, advising them on buy and sell directions, as well as trading his own personal account. Andrew, a regular key-note speaker at trading and wealth-creation events throughout the Asia Pacific region, is an authorized representative registered with the Australian Securities and Investment Commission (ASIC).

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