After last Friday’s attacks in Paris, the Euro is coming under heavy sell pressure and earlier struck a 6½ month trough versus the Japanese Yen. Investors’ flight to safety in the wake of the attacks is also lifting the Swiss Franc, as well as the US Dollar. Despite the safe haven drive, analysts point out that the response was relatively muted as investors await the seeming divergence between Federal Reserve Bank and many of the other central banks. Officials from the European Central Bank have made it clear that more easing is needed to get the economy moving forward.
As reported at 11:00 am (GMT) in London, the EUR/JPY was trading at 131.9030 Yen, a gain of 0.07% and edging away from the day’s low of 131.1401 Yen. The EUR/USD was trading at $1.0726, down 0.40%; the pair ranged from $1.0711 to $1.0761. The EUR/CHF was lower at 1.0796 Swiss Francs, not far from the session low of 1.0784 Swiss Francs.
Yen Safe Haven Demand Trumps Dismal Data
The Japanese Yen’s rise is expected to continue as investors drive it higher, despite the efforts of the Bank of Japan to make the currency less attractive. Even the latest data on growth didn’t have the typical response; GDP contracted in the second quarter, with the first quarter revised lower. Despite the dismal news and expectations that the BOJ could be compelled to ease more, the Yen remains propped up by safe haven demand.