ICYMI – Market summary for today, 19 April 2024
Israel’s attack on Iran following a retaliatory drone strike, has intensified market volatility. This series of events caused a flight to safety among investors, influencing various asset classes and currency valuations globally. Following the initial news, the Swiss franc appreciated against the dollar, with an increase to 0.9089, reflecting a 0.35% rise on the day. Such movements were more pronounced earlier, suggesting an immediate risk-off sentiment among traders.
Israel’s credit rating has also been downgraded by S&P due to escalating regional tensions – a move which is indicative of the greater risk and instability in the region. The country is now rated AA- with heightened risks.
The yen saw an appreciation, reaching 154.38 against the dollar, a rise of approximately 0.2%. Historically, during times of uncertainty, on top of gold, both the Swiss franc and the yen have served as reliable safe havens. For instance, during the 2011 European debt crisis, both currencies experienced significant appreciation due to their perceived stability amidst regional instability.
The Australian and New Zealand dollars both dropped to five-month lows, with the Aussie falling to $0.64015 and the Kiwi to $0.58825. These movements underscore the sensitivity of these currencies to shifts in risk sentiment, particularly in the context of geopolitical strife.
Turning to the prospect of higher-for-longer interest rates in the United States, the ongoing robustness of the U.S. economy continues to recalibrate expectations around Federal Reserve policy. The anticipation of rate cuts has been markedly adjusted with only about 40 basis points of easing now expected, down significantly from earlier predictions of 160 basis points.
In Asia, the pressure on local currencies prompted a trilateral warning from the finance chiefs of the United States, Japan, and South Korea regarding potential interventions. This reflects a serious concern over the weakening of the Korean won, which hovered above the 1,400 mark against the dollar, indicating a potential area for joint currency intervention.
As central banks prepare for their upcoming policy meetings, the statements and actions they take will be crucial in shaping market movements. For example, the Bank of Japan hinted at a possible rate hike if the yen’s depreciation leads to inflation concerns, which could influence their policy decisions in the near future.
Start trading now — click here to create your live VT Markets account.
Education
Company
FAQ
Promotion
Risk Warning: Trading CFDs carries a high level of risk and may not be suitable for all investors. Leverage in CFD trading can magnify gains and losses, potentially exceeding your original capital. It’s crucial to fully understand and acknowledge the associated risks before trading CFDs. Consider your financial situation, investment goals, and risk tolerance before making trading decisions. Past performance is not indicative of future results. Refer to our legal documents for a comprehensive understanding of CFD trading risks.
The information on this website is general and doesn’t account for your individual goals, financial situation, or needs. VT Markets cannot be held liable for the relevance, accuracy, timeliness, or completeness of any website information.
Our services and information on this website are not provided to residents of certain countries, including the United States, Singapore, Russia, and jurisdictions listed on the FATF and global sanctions lists. They are not intended for distribution or use in any location where such distribution or use would contravene local law or regulation.
VT Markets is a brand name with multiple entities authorised and registered in various jurisdictions.
· VT Global Pty Ltd is authorised and regulated by the Australian Securities & Investments Commission (ASIC) under licence number 516246.
· VT Global is not an issuer or market maker of derivatives and is only allowed to provide services to wholesale clients.
· VT Markets (Pty) Ltd is an authorised Financial Service Provider (FSP) registered and regulated by the Financial Sector Conduct Authority (FSCA) of South Africa under license number 50865.
· VT Markets Limited is an investment dealer authorised and regulated by the Mauritius Financial Services Commission (FSC) under license number GB23202269.
· VTMarkets Ltd, registered in the Republic of Cyprus with registration number HE436466 and registered address at Archbishop Makarios III, 160, Floor 1, 3026, Limassol, Cyprus.
Copyright © 2024 VT Markets.