Weak Chinese data spur safe haven bids for yen

Tue Mar 8, 2016 3:29pm EST
 
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By Richard Leong

NEW YORK (Reuters) - News of deterioration in China's trade balance stoked safe-haven demand for the yen on Tuesday as investors shed holdings of stocks and other risky investments on renewed concerns about a slowing global economy.

Lower oil and industrial metal prices, which had reached multi-month highs in recent days, added pressure on the Canadian and Australian dollars and other commodity-sensitive currencies.

China's exports slumped 25.4 percent in February from a year earlier, the steepest drop since May 2009, while imports dropped 13.8 percent for a 16th consecutive monthly fall.

"If China is in trouble, we are seeing a flight to safety here," said Stan Shipley, strategist at Evercore ISI in New York.

Investors prefer the yen and Swiss franc in times of market volatility and economic worries.

The dollar was down 0.8 percent at 112.56 yen JPY= after hitting a one-week low of 112.41. The euro slipped 0.8 percent at 123.92 yen EURJPY=.

The Swiss franc gained before fading in U.S. trading. It was last down 0.1 percent against the greenback at 0.9956 franc CHF= and flat at 1.0964 franc per euro EURCHF=.

The Australian and Canadian dollars pulled away from multi-month highs touched on a rally in commodity prices.   Continued...

 
Euro, Hong Kong dollar, U.S. dollar, Japanese yen, pound and Chinese 100 yuan banknotes are seen in this picture illustration, in Beijing, China, January 21, 2016. REUTERS/Jason Lee