Safe haven assets jump on geopolitical uncertainties

Last Friday, the US Dollar rose against its major peers with gains limited as investors had already been on edge as Trump met Chinese leader Xi Jinping for talks in a two-day summit over flashpoints about North Korea and China’s huge trade surplus with the United States. Market participants now await the outcome of talks between the US and Chinese leaders, as well as the monthly jobs report due later in the day and that could back views for more US interest rate hikes. Non-farm payrolls likely increased by 180,000 jobs last month after rising 235,000 in February. Strong job gains should add upward pressure on wages, supporting higher interest rates.

Early on Friday as well, safe haven assets including Gold and the Japanese Yen rose against the US Dollar after the United States launched cruise missiles against an air base in Syria, from which a deadly chemical weapons attack was launched, raising concerns of a sharp escalation in the Syrian civil war. Trump ordered the strikes just a day after he pointed the finger at Assad for this week’s chemical attack, which killed at least 70 people, in the Syrian town of Khan Sheikhoun.

Meanwhile, the Euro dropped to a three-week low of 1.0626 against the US Dollar after European Central Bank President Mario Draghi’s said on Thursday that he does not see cause to deviate from the ECB’s stated policy path. Draghi said that before altering its stance, the European Central Bank must have sufficient confidence that inflation would return to target over a medium-term horizon.