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FOREX-Yen and dollar rise as investors seek safety

Published 13/08/2019, 11:57
© Reuters.  FOREX-Yen and dollar rise as investors seek safety
USD/ARS
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DXY
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* Argentina selloff, Hong Kong protests rattle markets
* Analysts predict more yen strength in months ahead
* Euro weakens after gloomy German sentiment reading
* Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh

(Adds details, updates prices)
By Tommy Wilkes
LONDON, Aug 13 (Reuters) - The Japanese yen remained near
seven-month highs on Tuesday and the U.S. dollar supported, as
investors unnerved by the Sino-U.S. trade war, protests in Hong
Kong and a crash in Argentina's peso currency sought safety.
The euro briefly extended an earlier decline after a survey
showed German sentiment deteriorated more than expected.
Investors have flocked to the yen amid an escalating trade
war between China and the United States and worries about a
global economic slowdown. The Japanese currency, along with the
dollar and Swiss franc, is a safe haven in times of uncertainty.

The yen got a fresh boost from growing unrest in Hong Kong
and surprise election results in Argentina that led to a rout in
the country's currency, the peso, and stocks and bonds.
ING analysts said the yen was benefiting "from the best of
both worlds", pointing to general risk aversion and a rush to
price in more interest rate cuts by the Federal Reserve. They
think the yen will rally to 102 or 103 per dollar later this
year.
U.S. Treasury yields have declined steadily recently, and
the spread between U.S. and Japanese benchmark 10-year yields
has shrunk to its narrowest since November 2016.
The yen fell as much as 0.2% to 105.1 JPY=EBS per dollar.
It reached 105.05 on Monday, a seven-month high and, excluding
the January flash crash, its strongest since early 2018.


The dollar rose 0.2% against a basket of other currencies,
its index reaching 97.563 .DXY before giving up some of those
gains.
The Swiss franc, also viewed as a safe haven, rose 0.1% to a
two-year high against the euro of 1.0862 francs EURCHF=EBS .
The euro was last down 0.1% at $1.1204 EUR=EBS against the
dollar, having fallen as low as $1.1182.
The offshore Chinese yuan 7.104 after the People's Bank of China set a midpoint rate at an
11-year low that was still stronger than expected A senior official at the People's Bank of China told Reuters
on Tuesday that the yuan was at an appropriate level

Argentina's peso ARS= lost more than 15% to 52.15 per
dollar on Monday after brushing a record low of 61.99
Argentina's president, Mauricio Macri, lost in presidential
primaries by a wider margin than expected worries about a return to interventionist policies
under a populist winner.
Commerzbank strategist Antje Praefcke said that the reaction
elsewhere to the Argentine primary result was a "sign of just
how jittery markets are".
Sterling bounced around $1.2080 GBP=D3 , not far from the
$1.2015 it touched on Monday, its lowest in more than two years,
as fears of a no-deal Brexit dominated trading.

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Yen vs U.S. dollar https://tmsnrt.rs/2MYxgb6
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(Editing by Larry King)

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