15.08.201910:54 Forex Analysis & Reviews: Demand for protective assets is growing, focus is on the yen

The tense economic and political situation dictates the demand for the assets of the "safe haven", among which the leaders are gold, silver and the Japanese currency. The increasing fear of recession that has swept the markets is pushing investors toward protective assets, experts say.

Assets of the "safe haven" are in high demand, despite the low implied volatility in major world currencies. Analysts draw attention to a slight depreciation of the Scandinavian currencies, as well as to massive sales in the bond markets of Argentina and South Africa. Demand for "safe haven" currencies, primarily the yen, is recovering after new data on retail sales and industrial output in China, which turned out to be worse than forecasts.

Concerns over continued German economic growth and global trade tensions keep investors in tone. The current situation negatively affected the EUR / USD pair: it fell 0.1% after the publication of weak data on the German economy. According to the report, the German economy experienced a recession in the second quarter of 2019.

The dynamics of the yellow metal is showing growth again. On Wednesday evening, August 14, the price of gold reached $ 1,511 per 1 troy ounce, and today, the precious metal is trading in the range from $ 1,524 to $ 1,525 per ounce.

The yen is at the peak of demand, as traders overestimated the likelihood of progress in trade negotiations between the United States and China. Although, experts do not expect a positive resolution of the protracted trade conflict in the near future. At the same time, the USD / JPY pair fell 0.8% to 105.88, after increasing by 1.4% last Tuesday. According to analysts, the current rise was the largest since March 2018. Therefore, most experts expect further appreciation of the Japanese currency. Currently, the yen is holding near the level of 106.24 for 1 US dollar and is not going to give up positions.