Yen surges on Spain terrorist attack and Trump turmoil

Last Friday, the Dollar slipped versus the safe-haven Yen, hampered by renewed investor concerns over the Donald Trump administration’s ability to push forward its economic policy agenda.

Meanwhile, US Stocks declined amid speculation that Gary Cohn, the former Goldman Sachs Group Inc. president, who is Trump’s top economic adviser, might resign. Moreover, confidence was shaken further after a van mowed through crowds of tourists in Barcelona last Thursday, killing at least 13 people and injuring more than 100 in an attack authorities were treating as Islamic terrorism.

As for the Euro, the currency recovered after falling last week to $1.1661, its lowest level of the month, as European Central Bank officials showed concern that its further rise could derail the region’s recovery, a view that could make the bank tread more carefully when starting to pare back its crisis-era support.

The Euro has surged dramatically in recent months on the back of the region’s economic recovery, rising almost 5% against major currencies since the middle of May. While the Euro’s rise reflects the region’s economic strength, it also creates a communication problem for the ECB as it looks to make decision on paring back its €2tn quantitative easing program.

Last Wednesday, the Sterling rose versus Euro after a batch of UK retail sales helped the Pound pull away from 10-month lows hit on Thursday. Month-on-month the sales numbers were higher than forecast although headline year-on-year growth dipped to 1.3% from a revised 2.8% a month earlier and compared to forecasts of 1.4%.