Hawkish global central banks have sent the dollar lower this year, while the Japanese yen and the Aussie dollar have gained.
Higher US interest rates have done little to stimulate the dollar, decreasing 6.6% this year.
The pound has suffered since the UK voted to leave the European Union and has stayed at the low level of 1.29 against the dollar. The dollar has retracted to levels seen before the Great Recession.
The weaker pound and dollar has spurred interest in the Japanese yen.
The biggest beneficiary however is the euro, up 7.3% since the beginning of the year.
Energies got a boost as oil continues to recover, hovering at a three-week high this morning. However, gains were capped by OPEC’s output increase. North Korea’s missile strike kept oil from sliding further, leaving the commodity flat.
The missile launch has captivated investor attention, leading many to place bullish bets on gold. The safe-haven commodity has increased 0.4% after a sharp sell-off in yesterday’s trading session. One bullion of the precious metal will now cost you $1224.99.
US markets are shut for Independence Day however the market is all but quiet.
A sell-off of riskier assets came after news that North Korea launched a successful ballistic missile. Optimism spurred by positive US data was overshadowed by the news as investors favoured safe-havens like gold and the yen.
The negativity from the US spread to European stocks. The worst effected sector was telecom and technology shares.
By Adrienne Murphy – Chief Market Analyst, Avatrade