European Session – Risk ahead of Ukraine referendum benefits yen
March 14, 2014 2:50 pm
Safe haven demand favoured the yen ahead of this weekend’s risk event. The Crimean referendum to secede from Ukraine will be held this Sunday while Western countries are threatening to impose sanction on Russia, which refuses to back down on its plans to annex the Crimean region. Russia has gone ahead with military exercises near its border with Ukraine. Meanwhile, China’s growth concerns are also weighing on market sentiment.
The yen is increasingly gaining strength heading into the US session as the trading week draws to a close and risk is ahead, given the impact of looming economic consequences that may result from the referendum in Crimea. The University of Michigan sentiment index was also released showing the preliminary reading fell to 79.9 in March, down from the 81.6 final reading in February. This was below expectations for a reading of 82 and the lowest level since November of last year. The dollar ended the European session down 0.21% at 101.36 yen.
The euro retraced some losses made after a tumble from a 2 ½ year high on Thursday following European Central Bank President Mario Draghi who commented the central bank has been preparing additional policy steps to deal with deflation in the euro zone. The euro was up 0.40% against the dollar to 1.3912 and up 0.21% to 141.02 yen.
Data releases from the Eurozone today had little impact on the euro. Germany’s inflation figures were as expected and fourth quarter Eurozone employment rose 0.1% in the quarter-on-quarter.
Sterling was down 0.08% against the dollar to 1.6607. Data today showed the UK posted a larger-than-expected trade deficit in January which brings into question the health of the UK economy. Focus now turns to next week’s UK employment data. Employment figures are expected to show a 25,000 dip in the number of people registered as out of work, reducing the jobless rate to 7.1%.
Safe haven demand favoured the yen ahead of this weekend’s risk event. The Crimean referendum to secede from Ukraine will be held this Sunday while Western countries are threatening to impose sanction on Russia, which refuses to back down on its plans to annex the Crimean region. Russia has gone ahead with military exercises near its border with Ukraine. Meanwhile, China’s growth concerns are also weighing on market sentiment.
The yen is increasingly gaining strength heading into the US session as the trading week draws to a close and risk is ahead, given the impact of looming economic consequences that may result from the referendum in Crimea. The University of Michigan sentiment index was also released showing the preliminary reading fell to 79.9 in March, down from the 81.6 final reading in February. This was below expectations for a reading of 82 and the lowest level since November of last year. The dollar ended the European session down 0.21% at 101.36 yen.
The euro retraced some losses made after a tumble from a 2 ½ year high on Thursday following European Central Bank President Mario Draghi who commented the central bank has been preparing additional policy steps to deal with deflation in the euro zone. The euro was up 0.40% against the dollar to 1.3912 and up 0.21% to 141.02 yen.
Data releases from the Eurozone today had little impact on the euro. Germany’s inflation figures were as expected and fourth quarter Eurozone employment rose 0.1% in the quarter-on-quarter.
Sterling was down 0.08% against the dollar to 1.6607. Data today showed the UK posted a larger-than-expected trade deficit in January which brings into question the health of the UK economy. Focus now turns to next week’s UK employment data. Employment figures are expected to show a 25,000 dip in the number of people registered as out of work, reducing the jobless rate to 7.1%.
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