Safe haven demand helped to push the Swiss Franc and the Japanese Yen higher while commodity currencies such as the Australian and Canadian Dollars were sent lower after oil prices fell. The US Dollar was under pressure as unclear signals from Fed officials left investors guessing what might come next. Meanwhile, a selloff in certain sectors of the equities market, and especially mining shares, caused nervous jitters that rippled across the financial markets.
As reported at 11:52 am (BDT) in London, the USD/JPY pair was trading at 119.81 Yen, a loss of 0.08%. The USD/CHF was 0.10% lower at 0.9729 Swiss Francs, while the EUR/CHF was lower at 1.0927, a loss of 0.18%. The AUD/USD pair was lower at 0.6975, down 0.13% while the USD/CAD was 0.12% higher at C$1.3411. The US Dollar Index was lower at 96.006 .DXY, a loss of 0.3%.
Global Situation a Major Concern
Markets are concerned about the financial condition of the global economy, with many struggling for traction, including power houses China and Japan, the world’s second and third largest economies, respectively. Both countries governments and central banks have been attempting to shore up a stagnant economy via fiscal and monetary policies. However, the situation remains dire. In contrast, an improved US economy has resulted in a divergence of monetary policies between the Fed and the other major central banks. That has caused the Fed’s decision makers to rethink its position on tightening policy in the US, which could cause the situations abroad to worsen.