A growing crisis in Yemen has fueled concerns that the Middle East is on the verge of becoming a powder keg for geopolitical tensions which has sent investors rushing to safe haven currencies like the Japanese Yen and the Swiss Franc. Although the US Dollar has long been held as a safe haven, recent softness in economic data has resulted in investor uncertainty which earlier pushed the greenback to a 5-week trough versus the Japanese Yen, but that uncertainty has also pushed the greenback lower against the Euro despite the common currency’s inherent weakness.
As reported at 9:20 am (GMT) in London, the USD/JPY was lower at 118.4850 Yen, a decline of nearly 1% on the day while the USD/CHF was also lower at 0.9503 Swiss Francs, down 1.04%. The EUR/USD pair was trading at $1.1041, a gain of 0.70% and the high for the session.
Soft Data Weighs on Dollar
Bullish sentiment has eroded for the US Dollar after the Federal Reserve was unexpectedly dovish in their latest policy decision, suggesting to investors that it would be data that would drive an interest rate hike. Yesterday’s data showed that February’s Durable Goods figure declined for the sixth consecutive month, another clear sign that the growth in the US economy has recently slowed.