Investing.com – Geopolitical concerns rocked markets on Tuesday following a missile launch over Japan by North Korea. Sterling held up against a the dollar, however it dropped considerably against safe haven currencies and its European counterpart.
The euro made fresh eight year highs against the pound on Tuesday. It jumped above 0.93 to its highest level since 2009. At 09:10 GMT was 0.9305, a move of 0.45% on the previous session close.
The euro has risen more than 9% against sterling so far this year. Diverging economic outlooks continue to make a case for parity.
Data released on Tuesday regarding house price growth in the UK showed sluggish growth, indicating that the UK housing market looks to be the most recent victim of the post-Brexit referendum spending squeeze.
According to , UK house prices rose year-on-year by 2.1% in August, a three month low equalling May’s four year low. Consensus growth was 2.5%.
Positive data from the euro-zone helped boost the euro against the pound. was better than expected, while the reading also came out better than expected.
The dollar suffered following the dovish speech by Fed Chair Janet Yellen at the Jackson Hole Symposium on Friday, which made no reference to monetary policy.
The aftermath of tropical storm Harvey has also hit the greenback. Many oil refineries have been affected and much of Texas has seen catastrophic flooding.
Investors will be watching the dollar as President Trump is set to make a speech on Wednesday regarding his tax reform plans.
The , which measures the greenback’s strength against a trade-weighted basket of six major currencies, slid 0.62% to 91.60.
was 1.2965, up 0.25% on the dollar.
In the wake of the missile launch by North Korea, safe haven assets rocketed. was down 0.49% to 140.61, while was down 0.84% at 1.2250.
Commodity currencies struggled as safe havens made gains, however sterling was down against the New Zealand and Canadian dollars.
was up 0.24% to 1.6277. dipped 0.07% to 1.7809.
fell 0.22% to 1.6138.
. The focus is set to be on citizens’ rights; the land border between the Republic of Ireland and Northern Ireland; and the ‘divorce bill’ – the amount of money that Britain will have to pay upon its exit from the European Union.
The EU has made it clear that these issues will have to be resolved before negotiations begin on future trade deals. There are rumours that the UK government plans to move ahead with trade talks as soon as possible.
Investors will be watching the Brexit negotiations for progress, and looking out for the figures released on Friday.
Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.