29/08/2017 - North Korea Concerns Cause Dollar To Take Further Hit

USD

The Dollar hit a four-month low against the yen on Tuesday after North Korea fired a missile that passed over northern Japan and landed in waters off Hokkaido, in the latest act of provocation by Pyongyang that has ramped up global tensions.

In a sharp escalation of tensions on the Korean Peninsula the safe haven Yen strengthened, as it typically has during times of geopolitical or financial stress.

The Dollar was already on the defensive, particularly against the euro, after Federal Reserve Chair Janet Yellen did not mention monetary policy at a central bankers' summit in Jackson Hole last week. European Central Bank President Mario Draghi's also held back from talking down the euro at the same meeting which extended the gains. 

The Dollar had also weakened after Tropical Storm Harvey paralyzed Houston, Texas, and many oil refineries in the U.S. Gulf Coast, spurring worries about the storm's potential impact on the U.S. economy.

EUR

Brexit secretary David Davis and his EU counterpart Michel Barnier launched the latest round of exit talks last night. Prominent figures in the city have expressed fresh concern over the lack of progress on a transitional deal for financial services. They have warned the government to secure a bespoke transitional Brexit deal for financial services by Christmas – or risk doing unnecessary damage to the Square Mile. But yesterday’s launch of the third round of talks highlighted a continuing gap between the two sides over the sequence of negotiations.

Key Announcements

15:00 - USD -CB Consumer confidence is forecast to fall to 120.9