The geopolitical situation in Ukraine escalated once again and resulted in increased movement into the Japanese Yen and the Swiss Franc, safe haven currencies that FX players demand during times of uncertainty. According to media reports, Russia has continued to launch military maneuvers in the Crimea region, despite strong warnings from both the U.S. and the European Union which condemned President Putin’s actions. In a letter to clients, analysts at BNP Paribas confirm investors’ renewed anxiety given the Russian troop movements and possible sanctions against the government.
As reported at 11:34 a.m. (JST) in Tokyo, the USD/JPY was trading at 101.81 Yen, moving away from yesterday’s high of 102.865 Yen. The EUR/JPY also moved away from Thursday’s session high of 143.38 Yen to trade at 141.14 Yen. The USD/CHF had earlier hit a 2½ year trough at 0.8698 Swiss Francs but remains within striking distance at 0.8752 Swiss Francs.
China Data Limits Aussie and Kiwi Gains
Also adding to the safe haven flight was growing concerns that the Chinese economy is in the doldrums and that the central bank there might have to take proactive measures to kick start the economy. On Thursday, industrial production, retail sales and urban investment figures for January all came in well below analysts’ expectations, reinforcing concerns of a Chinese economic slowdown. That news sent both the Aussie and Kiwi Dollar’s lower, curtailing gains made in the previous session; the AUD/USD pair traded at $0.9034, moving away from a 1-week peak at $0.9014 while the NZD/USD slipped from an 11-month high of $0.8607 to trade at $0.8548.