Currencies: Haven Currencies Bounce Higher As Trade Row Keeps Grips On Markets

Haven currencies, including the Japanese yen and Swiss franc bounced higher on Monday as the trade row between the U.S. and China remained in focus.

Trade tensions have been on the rise, with China vowing to retaliate against a U.S. round of tariffs by slapping duties on American export products, including crude oil, and suspending all previous trade agreements with Trump’s administration.

Read: Escalating U.S.-China trade spat comes at a bad time for global growth, economist says

Uncertainty over future relations between the two trade giants saw investors drop risky emerging market currencies and go for safer ones. Japan’s yen USDJPY, -0.18%  and Switzerland’s USDCHF, -0.2607%  both strengthened against their U.S. counterpart, with one dollar buying ¥110.45, down from ¥110.65 late Friday in New York, and 0.9942 francs, down from 0.9974 late Friday.

But the dollar index remained little changed. The ICE U.S. Dollar Index DXY, -0.04%  was last slightly up at 94.827, after logging a gain of just over 1% last week, according to FactSet. The broader WSJ Dollar Index BUXX, +0.07% was little changed in positive territory at 88.07.

“Traditional safe havens are naturally doing well this morning with gold up a couple of dollars and the yen in the green against the dollar, euro and pound,” said Craig Erlam, senior market analyst at Oanda.

The euro-yen pair EURJPY, -0.19%  was down 0.1% with one euro buying ¥128.27, according to FactSet.

Read: Here’s why trade-war fears trump the Bank of Japan when it comes to the yen

China’s yuan, which is pegged to the dollar and trades in a tightly defined range, slipped, with one dollar buying 6.4397 onshore yuan USDCNY, +0.1242%  , little changed but in positive territory, and 6.4578 offshore yuan USDCNH, +0.3558%  , up 0.3%.

Beyond trade issues, traders also kept global interest rate differentials on their minds, as the Bank of England is set Thursday to deliver its monetary policy update. The British pound, already stuck in a downtrend since April, is expected to be confined to lackluster trading in the lead-up to the policy meeting.

Don’t miss: Here’s how the ECB just breathed new life into the dollar rally, analysts say

“The key event of the week for the pound is the BOE meeting this Thursday. We expect the pound price action to be rather muted both going into the meeting and after it, given the likely fairly vague policy signal in the post-meeting statement,” ING analysts said in a note.

The British pound GBPUSD, -0.3238%  last traded at $1.3249 compared with $1.3280 late Friday.

RECENT NEWS

What A Rising VIX Means For Pension Funds

Wall Street’s latest selloff has moved beyond a technology-sector wobble and become a broad market event. The Nasdaq C... Read more

Behaviour Cannot Fix A Portfolio Construction Flaw

A Retiree Shouldn't Be Asked to Behave Their Way Out of a Portfolio Construction Problem Why behavioural coaching shoul... Read more

Behavioural & Retirement Portfolio Resilience

Behavioural Survivability and Retirement Portfolio Resilience Why the lived experience of market recovery matters as mu... Read more

Australia's Rate Rise Bites: Highest In 15 Years

The Reserve Bank of Australia has lifted interest rates to their highest level since 2011, and its governor admits the w... Read more

October Retirement Portfolio Resilience Assessment

Markets stabl Read more

Gyrostat September Retirement Portfolio Resilience Assessment

September Retirement Portfolio Resilience Assessment Markets have fallen. The price of risk has risen. ... Read more