NEW YORK: The yen strengthened Tuesday as a steep fall in oil prices rattled equity markets and sent investors flocking to the Japanese currency, considered a relative safe haven amid turmoil.
US and Brent crude prices sank more than four percent after OPEC kingpin Saudi Arabia reaffirmed its opposition to a production cut in the face of abundant global supplies.
The crude losses weighed on global equity markets as stocks in energy-related companies and banks exposed to the sector suffered.
The yen benefited, with the dollar falling 0.7 percent to 112.08 yen and the euro down 0.8 percent at 123.49 from the prior day’s session. The Swiss franc, also considered a safe investment, gained.
The euro was under pressure from weak business confidence data in Germany, Europe’s largest economy. The Ifo economic institute said sentiment dropped for a third month in February to its lowest level in more than a year.
Britain’s pound continued to fall, to 1.4022 per dollar, on concerns that the country may vote to exit the 28-nation European Union in a June 23 referendum.
“Sterling slid 1.8 percent Monday for its worst day since 2010. As bearish as the outlook has turned for the pound, what could help slow its descent is how opinion polls show the ‘in’ camp in the lead,” said Joe Manimbo, senior market analyst at Western Union Business Solutions.
2200 GMT Tuesday Monday
EUR/USD 1.1017 1.1029
EUR/JPY 123.49 124.52
EUR/CHF 1.0923 1.1020
EUR/GBP 0.7857 0.7796
USD/JPY 112.08 112.91
USD/CHF 0.9914 0.9992
GBP/USD 1.4022 1.4148
