image

Yuan

Gold, yen and crude jump as US launches missile attack on Syria

PUBLISHED : Friday, 07 April, 2017, 11:59am
UPDATED : Friday, 07 April, 2017, 12:09pm

Safe haven assets such as gold and the Japanese yen were higher on Friday in reaction to the US missile attack on Syria, as investors sought to assess the impact of Washington’s display of force following a suspected chemical weapons attack on civilians.

The Japanese yen climbed 0.5 per cent to 110.39 per dollar, its strongest level since mid-November.

Spot gold price soared 1.2 per cent to 1,266.5 per ounce, also its highest level since mid-November. Meanwhile Brent crude prices surged 2 per cent to US$55.99 a barrel in London while West Texas Intermediate rose 1.8 per cent to US$52.7 a barrel.

“The market was a bit panicked after the news was out, but so far I don’t think the attack represents a turning point of the US’ attitude towards Syria,” Shen Jianguang, chief economist at Mizuho Securities Asia.

President Donald Trump called on “all civilised nations” to join the US in seeking an end to the carnage in Syria, after ordering dozens of cruise missile to strike a Syrian air force base, reflecting the first time the US military has targeted military assets of President Bashar al-Assad.

Trump launches massive cruise-missile attack on Syria, then calls on ‘civilised nations’ to end carnag

It’s not clear yet who should be responsible for the chemical weapons attack in Syria, and the US was making a “symbolic move”, Shen said.

Onshore yuan in Shanghai at one stage fell 0.1 per cent to 6.9036 against the US dollar, the lowest level in a month. Offshore yuan in Hong Kong also touched a one-month low at 6.9003 per dollar.

The People’s Bank of China set the yuan reference rate at 6.8949 per dollar, 19 basis points weaker than its daily fixing on Thursday.

The US dollar currency index, or DXY, which measures the strength of US dollar against six rival currencies, slipped 0.1 per cent to 100.65.

Shen said the US dollar still looked stable despite the decline, but said some investors were likely take risk-averse moves in short term.

business-article-page