Today investors appear less wary of conflict. Some of the optimism about the United States and China signing a trade agreement in a few days is returning, as the fear of a war between the US and Iran is subsiding at the same time.
Of course, the United States and Iran have not even come close to reconciliation. Donald Trump is certainly not helping things, as his angry tweets against Iran can be interpreted as further provocation in light of the assasination of Soleimani by the US military last week. The possibility of a serious armed conflict remains, but at least for now, it appears that neither country is rushing to declare war on the other.
As a result, we are seeing investors lose interest in safe haven assets. The Japanese yen, which was trading near three-month highs just last week, is now retreating again, as is the Swiss franc.
The American dollar’s position in all of this is also interesting, because the reserve currency is a safety asset, but it is affected by so many factors simultaneously that right now it is appreciating, unlike other safe havens.
In other news, today the European Union released its CPI reports for December, which were perfectly in line with forecasts. Later today we expect the ISM non-manufacturing report from the United States.
