Safe havens gain on reports of imminent Iran attack on Israel
Updated at 1035 EDT
By Karen Brettell
Oct 1 (Reuters) -Safe haven currencies the Japanese yen and Swiss franc gained on Tuesday after news reports that Iran is preparing to imminently launch a ballistic missile attack against Israel, while U.S. jobs data showed a resilient labor market.
A senior White House official said on Tuesday that the United States is actively supporting preparations to defend Israel.
"The market has largely ignored the Middle East conflict in the last month, but a direct Iran-Israel confrontation is always at risk of spiraling," said Adam Button, chief currency analyst at ForexLive in Toronto.
The Japanese yen JPY=EBS strengthened 0.1% against the U.S. dollar to 143.5. The dollar was roughly flat against the Swiss franc CHF=EBS at 0.846, erasing earlier gains.
The dollar index =USD rose 0.4% to 101.15.
U.S. data on Tuesday showed a solid economy, a day after Federal Reserve Chair Jerome Powell pushed back against the likelihood of another 50-basis point rate cut when the U.S. central bank meets next month.
U.S. job openings unexpectedly increased in August after two straight monthly decreases, but hiring was soft and consistent with a slowing labor market.
U.S. manufacturing also held steady at weaker levels in September, the Institute for Supply Management (ISM) said, but new orders improved and prices paid for inputs declined to a nine-month low, which together with falling interest rates bode well for a rebound in activity in the coming months.
Traders are trying to gauge the likelihood that the Fed will cut rates again by 50 basis points at its Nov. 6-7 meeting.
Powell indicated on Monday the Fed would likely stick with quarter-percentage-point interest rate cuts moving forward and was not "in a hurry" after data boosted confidence in ongoing economic growth and consumer spending.
Traders are pricing in a 41% chance of a 50 basis point reduction in November, up from around 35% on Monday but down from 58% a week ago, according to the CME Group's FedWatch Tool.
The U.S. central bank on Sept. 18 cut rates by 50 basis points, which Powell called a "recalibration" to account for the sharp decline in inflation since last year.
"The door has not been closed on a 50 bps cut, because if economic data tanks then such a cut is warranted. But Powell clearly thinks markets are overly excited" about upcoming cuts, said Matt Simpson, senior market analyst at City Index.
The ISM’s non-manufacturing report on Thursday and Friday's closely watched government jobs report for September are the next major U.S. economic releases.
The euro EUR=EBS was last down 0.55% at $1.1075, following dovish comments by European Central Bank (ECB) officials.
ECB President Christine Lagarde told parliament that "the latest developments strengthen our confidence that inflation will return to target in a timely manner," and said this should be reflected in the Oct. 17 policy decision.
Policymaker Olli Rehn also said that the slowing down in euro zone inflation means that there are more reasons to justify an interest rate cut at the ECB's October policy-setting meeting.
Euro zone inflation dipped below 2% for the first time since mid-2021 in September, Eurostat data showed on Tuesday.
Traders are also focused on the new government in Japan, where the Prime Minister Shigeru Ishiba on Tuesday unveiled his cabinet as he seeks to heal party divisions and secure a national mandate with an Oct. 27 snap election.
Ishiba is seen by markets as a monetary policy hawk, despite a recent toning-down of rhetoric on the need for policy normalization.
Bank of Japan policymakers discussed the need to go slow in raising interest rates as jittery markets clouded the outlook, a summary of their September meeting showed, reducing the chance of a near-term rate hike.
The Australian dollar AUD=D3 weakened 0.32% to $0.6891.
Australian retail sales rebounded more than expected in August after a soft July as unusually warm weather brought forward spring spending, a possible sign consumers are dipping into extra income from recent tax cuts.
In cryptocurrencies, bitcoin fell 1.90% to $62,570.
Reporting By Karen Brettell; Additional reporting by Amanda Cooper and Brigid Riley; Editing by Barbara Lewis
Mga Kaugnay na Asset
Pinakabagong Balita
Disclaimer: Ang mga kabilang sa XM Group ay nagbibigay lang ng serbisyo sa pagpapatupad at pag-access sa aming Online Trading Facility, kung saan pinapahintulutan nito ang pagtingin at/o paggamit sa nilalaman na makikita sa website o sa pamamagitan nito, at walang layuning palitan o palawigin ito, at hindi din ito papalitan o papalawigin. Ang naturang pag-access at paggamit ay palaging alinsunod sa: (i) Mga Tuntunin at Kundisyon; (ii) Mga Babala sa Risk; at (iii) Kabuuang Disclaimer. Kaya naman ang naturang nilalaman ay ituturing na pangkalahatang impormasyon lamang. Mangyaring isaalang-alang na ang mga nilalaman ng aming Online Trading Facility ay hindi paglikom, o alok, para magsagawa ng anumang transaksyon sa mga pinansyal na market. Ang pag-trade sa alinmang pinansyal na market ay nagtataglay ng mataas na lebel ng risk sa iyong kapital.
Lahat ng materyales na nakalathala sa aming Online Trading Facility ay nakalaan para sa layuning edukasyonal/pang-impormasyon lamang at hindi naglalaman – at hindi dapat ituring bilang naglalaman – ng payo at rekomendasyon na pangpinansyal, tungkol sa buwis sa pag-i-invest, o pang-trade, o tala ng aming presyo sa pag-trade, o alok para sa, o paglikom ng, transaksyon sa alinmang pinansyal na instrument o hindi ginustong pinansyal na promosyon.
Sa anumang nilalaman na galing sa ikatlong partido, pati na ang mga nilalaman na inihanda ng XM, ang mga naturang opinyon, balita, pananaliksik, pag-analisa, presyo, ibang impormasyon o link sa ibang mga site na makikita sa website na ito ay ibibigay tulad ng nandoon, bilang pangkalahatang komentaryo sa market at hindi ito nagtataglay ng payo sa pag-i-invest. Kung ang alinmang nilalaman nito ay itinuring bilang pananaliksik sa pag-i-invest, kailangan mong isaalang-alang at tanggapin na hindi ito inilaan at inihanda alinsunod sa mga legal na pangangailangan na idinisenyo para maisulong ang pagsasarili ng pananaliksik sa pag-i-invest, at dahil dito ituturing ito na komunikasyon sa marketing sa ilalim ng mga kaugnay na batas at regulasyon. Mangyaring siguruhin na nabasa at naintindihan mo ang aming Notipikasyon sa Hindi Independyenteng Pananaliksik sa Pag-i-invest at Babala sa Risk na may kinalaman sa impormasyong nakalagay sa itaas, na maa-access dito.
