Asian markets kicked off the week with gains on Monday as concerns over North Korea eased and a killer hurricane struck Florida with less force than feared.
Traders breathed a sigh of relief that Pyongyang did not fire another missile on Saturday, choosing instead to mark its foundation day with a parade.
The news provided some much-needed cheer for markets after last week’s sell-off sparked by Kim Jong-Un’s nuclear test, with safe-haven assets such as the yen and gold retreating on Monday and the dollar picking up.
The greenback had already come in for a pounding in recent weeks on waning expectations for further Federal Reserve interest rate hikes and doubts about Donald Trump’s chances of pushing through his market-friendly economic policies.
However, it bounced back on Monday, surging back above 108 yen from Friday’s 10-month lows, while it also clawed back against the euro.
“The dollar is on a slightly better footing in early trade as the as North Korea headline risk has cooled a bit from last week’s fevered pitch,” said Stephen Innes, head of Asia-Pacific trading at OANDA.
“With little lack of geopolitical headline escalation over the weekend, traders are nimbly unwinding some NK over hedges in early trade but are still on headline watch.”
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.