Holiday Season Market’s Winner: Safe-Haven Assets

It’s the time of year where investment markets are expected to be traded thinly, with lack of news in the market as Christmas and New Year’s celebration keeps everyone in their holiday spirit. However, the year 2019 ends with a surprise move in the market, with safe-haven assets’ being able to record gains throughout the joyous week. 

As the world gets ready to welcome a whole new year with endless possibilities, so is the FX market. The first event in focus for 2020 would be the ‘Phase One’ trade deal between the US and China, where US Trade Representative Robert Lighthizer previously announced that the singing of the agreement would take place during the first week of January.

However, similar events in the past where a deal was announced and agreed upon by both sides, namely the signing of phase one trade deal during APEC meeting in November, could turn haywire in just the blink of an eye, keeping current market skepticism in place until the deal is signed between both sides. With only a week more before both sides meet to sign the agreement, tables could turn anytime, such as delaying the plan to sign the deal. 

Last weekend rockets attacks created a risk aversion and geopolitical tensions; the rocket attacks in northern Iraq which took the life of one US citizens while harming several others; and also concerns lingering the news that North Korea would be preparing decisive and offensive countermeasures in terms of politics and military to preserve the country’s sovereignty and security.  

Before ending the year, safe-haven assets made their last appearance, recording substantial gains since Christmas, with gold gaining more than $40 in value while breaking back above its September high; whereas pair of USD/CHF fell to its lowest level since August and USD/JPY retracing from its top-levels. These significant gains were encouraged by the weakness in the dollar since the start of the month. 

What a way to end the year, with trading opportunities still available for grab in the market. A final note for 2019: Regain Capital wishes you a Happy New Year and may the year 2020 bring prosperity and good health to you all. 

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