Syrian Fears Set Markets on Edge

Thursday, 12 April 2018 6:39

By: DailyForex.com

On Wednesday, U.S. President Donald Trump criticized Russia for supporting Syrian President Bashar al-Assad after a suspected poison gas attack in Syria that killed dozens of people and injured hundreds. Trump warned of imminent military action in Syria, putting traders instantly on edge.

“Russia vows to shoot down any and all missiles fired at Syria. Get ready Russia, because they will be coming, nice and new and ‘smart!’,” Trump tweeted on Wednesday, sparking concerns that the country’s years-old civil will escalate into a physical battle.

On South Korea’s Kospi was trading higher on Thursday afternoon as most Asian indexes remained in the red. Asian markets had bounced earlier this week on renewed optimism that a trade war between China and the U.S. would be averted, but the move was short lived as geopolitical tensions once again pressured markets. Also pressuring markets was the release of minutes from the Federal Open Market Committee’s March meeting which shoed that “all” policymakers anticipate a strengthening U.S. economy and a rise in inflation levels. The minutes signaled to analysts that additional interest rate hikes will be coming.

Currency Market Movements

The dollar continued its struggle on Thursday, falling below the 107 mark against the yen to trade at 106.93 as of 1:13 p.m. HK/SIN, up slightly from lows hit earlier in the session. The greenback gained slightly against the euro, trading at $1.2356. The dollar index was at 89.61 .DXY, unable to break back over the 90-level hit earlier this month.

The Hong Kong dollar hit a 33-year low on Thursday. The currency is pegged to the U.S. dollar and was last trading at 7.8498. The Hong Kong Monetary Authority has not yet committed to stepping in to support the currency. A spokesperson for the HKMA said that it would purchase Hong Kong dollars only if banks make this request. The Hong Kong dollar has been one of the worst-performing Asian currencies this year, easing nearly 14 percent against the euro.

Sara Patterson has a Master’s Degree in political science and enjoys analyzing both current events and the international markets to get a fuller perspective of the currency market. Before turning to financial writing, she taught English writing skills to high-school age students. Sara’s work has been published on various financial and Forex blogs.

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