Yen Spikes and Aussie Tumbles in a “Flash Crash”


The Japanese Yen strengthened against peers as growth concerns triggered a "Flash Crash." Usually, investors rush to the JPY in cases of high market risks and uncertainty as it is well known as a safe-haven currency. The USDJPY fell to a low of 104.72 and recovered to 107.50 ahead of the European trading session. The GBPJPY dropped almost 600 pips to 131.43, the lowest in more than two years. The EURJPY declined to a twenty-month low of 118.90, and the AUDJPY tumbled to 70.65, the lowest since April 2009.


The Australian dollar was under pressure lately due to weakening economic activity in China. The Chinese economy has a great effect on the Australian economy as China is one of the major trade partners for Australia. The AUDUSD fell to 0.6744, the lowest since 2009, while the EURAUD 1.6555, the highest since August 2015.


The dollar index which measures the greenback against a basket of major currencies rose to a one-week high of 96.96. The week manufacturing data from Europe and Brexit uncertainty weighed on both the euro and the pound which boosted the demand for the dollar. On the other hand, the US 10-year yields declined further to 2.615%. Market participants await the ADP employment change ahead of tomorrow job's report.


Metals prices remain strong despite the dollar rebound. The gold ounce traded at a high of $1291 supported by market uncertainty. The silver ounce traded at a high of $15.60, while palladium is still hovering above $1260.


Oil prices finished higher on Wednesday on hopes that the OPEC+ production cut agreement will lead to a balanced market. The West Texas Intermediate crude futures rose to a high of $47.76, and Brent futures spiked to a high of $56.53. The American Petroleum Institute will report the US weekly crude oil stock later today.

Major Economic Events

GMT Country Event Expectation Previous
9:30 UK Construction PMI (Dec) 52.9 53.4
13:15 US ADP Nonfarm Employment Change (Dec) 179 179
15:00 US ISM Manufacturing PMI (Dec) 57.7 59.3
21:30 US API Weekly Crude Oil Stock   6.92


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