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FOREX: JPY Adopts Haven Status as Russia-West Tensions Ratchet Higher

FOREX
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  • JPY is comfortably the outperformer in G10 FX, with the currency re-adopting a safe haven status amid an upturn in geopolitical risk and escalated tensions between Russia and the West. The Kremlin have formally approved a further tweak to their nuclear doctrine, allowing for use of nuclear weaponry in the case of long-range missiles used to strike inside Russian territory. The new doctrine was tested almost immediately, as the Ukrainian military confirmed a strike on a warehouse in a military facility in Karachev, Russia - reportedly using US-supplied ATACMS weapons.
  • A bout of EUR sales came alongside the Ukraine headlines - prompting EUR/USD to hit new lows and show through the 1.0550 level. EUR/CHF came under pressure in tandem, through the October lows to pierce the mid-September support of 0.9307 - thereby exposing 0.9211.
  • EUR/JPY's risk-off triggered slide made light work of yesterday's lows on the Russia headlines, putting the cross at the lowest level since mid-October. The Oct21 low provides first support here at the Y162.00 handle, which coincides with the 38.2% retracement for the recovery off the post-intervention low - making support crowded at current prices. GBP/JPY has traded through the 50-dma for the first time since September, looking to 192.28 as next major support.
  • Focus for the session ahead turns to US housing starts and building permits data for October as well as the Canadian CPI print. The speaker slate is considerably quieter relative to yesterday, with just Fed's Schmid on the docket to speak on the economic and monetary policy. 
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  • JPY is comfortably the outperformer in G10 FX, with the currency re-adopting a safe haven status amid an upturn in geopolitical risk and escalated tensions between Russia and the West. The Kremlin have formally approved a further tweak to their nuclear doctrine, allowing for use of nuclear weaponry in the case of long-range missiles used to strike inside Russian territory. The new doctrine was tested almost immediately, as the Ukrainian military confirmed a strike on a warehouse in a military facility in Karachev, Russia - reportedly using US-supplied ATACMS weapons.
  • A bout of EUR sales came alongside the Ukraine headlines - prompting EUR/USD to hit new lows and show through the 1.0550 level. EUR/CHF came under pressure in tandem, through the October lows to pierce the mid-September support of 0.9307 - thereby exposing 0.9211.
  • EUR/JPY's risk-off triggered slide made light work of yesterday's lows on the Russia headlines, putting the cross at the lowest level since mid-October. The Oct21 low provides first support here at the Y162.00 handle, which coincides with the 38.2% retracement for the recovery off the post-intervention low - making support crowded at current prices. GBP/JPY has traded through the 50-dma for the first time since September, looking to 192.28 as next major support.
  • Focus for the session ahead turns to US housing starts and building permits data for October as well as the Canadian CPI print. The speaker slate is considerably quieter relative to yesterday, with just Fed's Schmid on the docket to speak on the economic and monetary policy.