The start of the trading week began in Asia with calm following an escalation of tensions in the Middle East and the downing of a Malaysian passenger jet, a casualty of the Ukraine-Russian conflict. Nonetheless, safe haven currencies like the Japanese Yen, Swiss Franc and U.S. Dollar remained in demand but volatility has at least eased. According to JP Morgan analysts, it appears that FX investors are viewing the geopolitical turmoil generally as localized or micro events and not as an event risk that could engender widespread destabilization.
As reported at 11:06 a.m. (JST) in Tokyo, the U.S. Dollar Index steadied at 80.513 .DXY, moving away from last Friday’s 1-month high while the EUR/USD was trading lower at 1.3530. The EUR/JPY was falling at 137.01 Yen, edging away from a a 5-month low of 136.71 Yen while the USD/JPY rebounded from a 1-week trough to trade at 101.35 Yen.
New Zealand Policy Decision Awaited
In New Zealand, analysts’ expectations are high that the Reserve Bank will raise its cash rate on Thursday, with the consensus calling for a hike to 3.5%, however there are some analysts who believe that the RBNZ might instead maintain the status quo and delay a rate hike for another month. The NZD/USD was trading at $0.8693, off the day’s peak of $0.8715.