- Iran fires missiles at U.S.-led forces in Iraq
- Japanese yen jumps to three-month high before retreating
- Focus on Trump's statement after Iran move
- U.S. ADP report shows private sector job gains in December
- Graphic: World FX rates in 2019 http://tmsnrt.rs/2egbfVh
(Adds FX strategist's comment, updates prices)
The safe-haven yen slid from three-month highs against the dollar on Wednesday, as U.S.-Iran tensions eased after President Donald Trump signaled there would be no further military action, for now, with Tehran appearing to have pulled back from its threats.
Another safe haven, the Swiss franc, also fell. It had earlier touched a more than one-week peak versus the greenback. Gold, which draws a bid in times of geopolitical stress, also gave up earlier gains, as did crude oil.
Trump backed away on Wednesday from days of angry rhetoric against Iran as the two countries tried to defuse a crisis over the American killing of Iranian military commander Qassem Soleimani.
In an address from the White House, Trump said the United States did not necessarily have to respond militarily to Iranian missile attacks on military bases housing U.S. troops in Iraq overnight.
Iran said it had fired missiles at U.S. targets in Iraq in retaliation for last Friday's U.S. drone strike that killed Soleimani.
"It's a big sigh of relief for the markets," said Shaun Osborne, chief FX strategist, at Scotiabank in Toronto.
"The markets were concerned that there was the risk of an escalation. I would be very surprised though that this would be the absolute end of all of this, but the risk of a direct confrontation between the U.S. and Iran seems less of a risk," he added.
SAFE HAVENS The yen, regarded as a safe haven in times of geopolitical turmoil because of its deep liquidity as well as Japan's current account surplus, dropped, pushing the dollar to a more than one-week high of 109.19 yen JPY= . The dollar earlier fell to a three-month low of 107.66 yen following Iran's strike, but was last up 0.8 at 109.18 yen.
The dollar also rose against the Swiss franc at 0.9737 franc CHF= , up 0.3%, after falling to a more than one-week trough earlier in the global session.
A higher-than-expected U.S. private payrolls number for December also boosted the dollar. The dollar index rose 0.3% to 97.30 .DXY in mid-afternoon trading.
The ADP National Employment Report on Wednesday showed private payrolls jumped by 202,000 jobs last month after an upwardly revised 124,000 gain in November. Economists polled by Reuters had forecast private payrolls of 160,000 last month following a previously reported 67,000 rise in November.
"The market still has the ultimate ballast, or anchor, which is the U.S. economy," said Marc Chandler, chief market strategist at Bannockburn Global Forex. "Even though there's some variance month-to-month between the ADP and the non-farm payrolls report, the ADP is still a good indicator of the underlying trend."
The euro, meanwhile, was at $1.1108 in afternoon trading, down 0.4% EUR= and near session lows.
======================================================== Currency bid prices at 2:29 PM (1929 GMT)Description RIC Last U.S. Close Pct Change YTD Pct High Bid Low Bid Previous Change Session Euro/Dollar EUR= $1.1109 $1.1151 -0.38% -0.90% +1.1168 +1.1109 Dollar/Yen JPY= 109.1800 108.4200 +0.70% +0.29% +109.2100 +107.6600 Euro/Yen EURJPY= 121.30 120.94 +0.30% -0.53% +121.3300 +120.1800 Dollar/Swiss CHF= 0.9735 0.9701 +0.35% +0.59% +0.9739 +0.9666 Sterling/Dollar GBP= 1.3100 1.3123 -0.18% -1.20% +1.3169 +1.3082 Dollar/Canadian CAD= 1.3028 1.3003 +0.19% +0.32% +1.3043 +1.2976 Australian/Doll AUD= 0.6870 0.6868 +0.03% -2.15% +0.6885 +0.6850 arEuro/Swiss EURCHF= 1.0818 1.0820 -0.02% -0.31% +1.0828 +1.0783 Euro/Sterling EURGBP= 0.8480 0.8496 -0.19% +0.31% +0.8516 +0.8456 NZ NZD= 0.6650 0.6640 +0.15% -1.28% +0.6672 +0.6619 Dollar/DollarDollar/Norway NOK= 8.8607 8.8522 +0.10% +0.94% +8.8807 +8.8338 Euro/Norway EURNOK= 9.8451 9.8757 -0.31% +0.07% +9.8980 +9.8451 Dollar/Sweden SEK= 9.4524 9.4506 -0.40% +1.12% +9.4765 +9.4240 Euro/Sweden EURSEK= 10.5033 10.5451 -0.40% +0.33% +10.5767 +10.5017 <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ Bumpy ride for markets after Iran strikes at U.S. forces in Iraq https://tmsnrt.rs/35EEV4c^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>
