On Wednesday, December 26, the US dollar remains under pressure after markets opened that did not work the day before because of the celebration of Catholic Christmas. On Tuesday, the American market held the worst trading session in the history of Christmas Eve. The largest indices, such as the S & P500, Dow Jones and Nasdaq, are significantly cheaper. At the moment, a decline of 0.5% is shown on Asian trading platforms.
Market participants are concerned about the temporary suspension of the US government, as well as tensions between President Donald Trump and the US Federal Reserve. Anxiety caused by the high probability of a global economic downturn led to a drop in the yield on 10-year US Treasury bonds by 25 basis points. This negatively affects the rate of the American currency, experts emphasized. According to Sim Moh, a currency strategist at Bank of Singapore, the Japanese currency will be the main beneficiary of the global risk aversion.
During eight consecutive trading sessions, the US dollar is depreciating against the yen. Reduced risk appetite increases the demand for safe-haven assets that support the yen, analysts say.
In addition to the fall in oil prices, the budget crisis in the United States adds to the negative global market. In the United States, experts record a complete discrepancy between the expectations of financial markets and the state of the American economy. Despite the strong statistics, market participants are confident in its further deterioration. Investors' fears are aggravated by the growth of political risks, which include the suspension of government work, the instability of the Fed's actions, and Donald Trump's inability to negotiate with the US Congress.
