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Forex - Yen Strengthens In Risk-Off Trade as Geopolitical Risks Weigh

Published 10/23/2018, 04:02 AM
Updated 10/23/2018, 04:02 AM
© Reuters.

© Reuters.

Investing.com - The yen strengthened on Tuesday as a slew of geopolitical risk factors bolstered safe haven demand for the Japanese currency, while the dollar dipped against a currency basket.

A rally in Chinese equities reversed overnight, pulling down European stocks and U.S. futures amid renewed worries over a host of economic and geopolitical issues, including U.S. President Donald Trump’s threats to pull out of the US-Russia nuclear arms agreement, U.S. midterm elections and fallout from the murder of Saudi critic Jamal Khashoggi.

Concerns over the U.S.-China trade war and political uncertainty in Europe also weighed.

The dollar weakened against the yen, with USD/JPY down 0.38% to 112.37 by 03:56 AM ET (07:56 AM GMT).

The Japanese currency is often sought by investors for its relative safety during periods of economic or geopolitical uncertainty.

The euro was lower against the yen, with EUR/JPY down 0.32% to 128.94.

The single currency was holding steady against the dollar, with EUR/USD last at 1.1468.

The euro remained on the back foot as Italy prepared to see its proposed budget for 2019 rejected by the European Union for breaching borrowing targets.

Italy’s populist government has pledged to stick with its budget plans despite criticism from Brussels.

The pound pushed higher, with GBP/USD rising 0.19% to 1.2988 after ending the previous session down 0.77% amid persistent worries over the Brexit stalemate.

The U.S. dollar index, which measures the greenback’s strength against a basket of six major currencies, edged down 0.07% to 95.68.

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