The euro fell to a 4 1/2-year low against the Swiss franc on Thursday and the yen strengthened as investors sought safe havens
The euro fell to a 4 1/2-year low against the Swiss franc on Thursday and the yen strengthened as a wave of risk-off sentiment washed over investors.
After weakening to a 3 1/2-week low a day earlier, the yen gained 0.3 percent against the dollar on Thursday and climbed to a four-month high versus the euro.
The Swiss franc strengthened against the euro, with the Eurozone currency dipping to 1.0622 Swiss francs, below its 2016 trough of 1.0623 and its lowest level since August 2015.
Gold, a traditional harbor in times of crisis, also saw gains in Thursday trading, with the spot price hitting around $1577 an ounce.
“Gold provides growth and positive performance when other assets are selling off,” said David McAlvany, CEO of the McAlvany Financial Companies and founder of Vaulted, a gold investing app.
“The benefit of owning gold alongside other more traditional assets, is you increase total returns and decrease volatility by having an asset which behaves in a countercyclical way,” McAlvany told The Epoch Times.
“Gold acts like insurance,” he added.
Cant Help But Move to Risk-off Trades
On Thursday, Chinas Hubei province, the epicenter of the coronavirus outbreak, reported 14,840 new cases of the virus as of Feb. 12, up from 1,638 new cases on Tuesday. The number of deaths in the province rose by 242, a daily record, to 1,310, according to official figures, which carry an overcast of uncertainty due to widely reported questions around accuracy and manipulation.
“When you see numbers like this, you cant help but move to risk-off trades, which means buy the yen and sell stocks,” said Ayako Sera, market strategist at Sumitomo Mitsui Trust Bank in Tokyo, in comments to Reuters.
Wall Streets main indexes eased from record highs and remained choppy on Thursday, while a day earlier, investors bought on signs that the virus spread was slowing, lifting the benchmark S&P 500 and the Nasdaq to their third straight closing highs.
The VIX, which measures volatility in the S&P500, spiked on Thursday as coronavirus news buffeted markets, but then fell, suggesting some easing of investor concern.