Yen And Euro Stand Tall, Oil Slide Brings Focus Back To Global Woes

Yen and Euro
The yen and euro held on to overnight gains against the dollar on Wednesday after a sharp slide in crude oil prices fuelled risk aversion, driving down US debt yields to 9-month lows and dulling the greenback’s appeal. The euro was steady at $1.0924 following an overnight gain of 0.3%. The dollar was little changed at 119.83 yen after shedding 0.9% overnight. The US currency had surged to a six-week high of 121.70 yen on Friday after the Bank of Japan stunned the markets by adopting a negative interest rate policy. But oil prices have since resumed declining, shaking equity markets and bringing investors’ focus back to global growth woes and central bank policies. “Since China growth concerns began shaking the markets in August, the broad theme has been central banks versus global risk,” said Shin Kadota, chief Japan FX strategist at Barclays in Tokyo. “The yen benefited from the latest round of ‘risk off’. The euro, which gained as US yields fell, has also become a sort of safe-haven since August. I don’t see China woes subsiding soon and the central bank versus global risk theme could play out indefinitely.”

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