Geopolitical Overhang

SINGAPORE (Reuters) – Asian shares dipped on Monday following a lackluster end to last week globally on some earnings disappointments, while the dollar edged up but remained capped by U.S. political uncertainty.

Investors stuck to perceived havens such as the Japanese yen and gold after North Korea conducted another missile test late on Friday that it said proved its ability to strike the U.S. mainland.

The U.S. responded by flying two bombers over the Korean peninsula on Sunday.

Markets were also awaiting China’s official factory and service sector activity surveys due out at 0100 GMT and a flurry of other data globally later in the week.

The safe-haven Japanese yen strengthened about 0.2 percent to 110.42 yen JPY= to the dollar. Gold XAU= hit a 6 1/2-week high early on Monday and was trading just a whisker below that level at $1,269.86 an ounce.

“The geopolitical overhang will likely keep top side moves in check early in the week as the disorganized U.S. and China policy towards North Korea is not helping matters,” Stephen Innes, head of Asia-Pacific trading at OANDA, wrote in a note.

Reuters

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Stephen Innes

Stephen Innes

Senior Currency Trader and Analyst at OANDA
Stephen has over 25 years of experience in the financial markets and specializes in Asian currencies at OANDA. After having started his trading career with NatWest Bank, he is currently based in Singapore as a Senior Currency Trader and Analyst with OANDA, focusing on the movement of the Aussie Dollar and ASEAN Currencies. Stephen has an extensive trading experience in Interest Rate Futures, Money Markets and Precious Metals. Prior to joining OANDA, he worked with organizations like Cambridge Mercantile, Nat West, Garvin Guy Butler, Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.
Stephen Innes
Stephen Innes

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