Deteriorating risk sentiment as a result of falling oil prices sent FX investors flocking to the safe haven currencies as those oil price worries trigger fresh concerns about global growth. The safe haven Japanese Yen was, by and large, the major recipient of those safe haven bids, despite the Bank of Japan’s ongoing efforts to devalue the currency in an effort to revive the flailing Japanese economy.
As reported at 8:48 a.m. (GMT) in London, the USD/JPY was trading at 118.30 Yen, recovering from a session low of 11.74 Yen, a level last seen in mid-December. Meanwhile, the EUR/JPY was trading lower at 139.8240 Yen.
Inflation Slips in U.K.
In the United Kingdom, as FX traders awaited news on CPI which unexpectedly fell on a year-over-year basis, the Pound had been under relentless pressure and the GBP/USD pair was trading at $1.5131, a loss of 0.34% and remaining within striking distance of the 18-month trough of $1.5078 which had been struck earlier in the session. The Bank of England will likely push back farther into 2016 any considerations for a rate hike given the unexpected decline in CPI which will also compel the BoE Governor to offer an explanation for the decline in inflation to the government’s Finance Minister.