Stocks Fall on Syria Tension; Investors Seek Refuge in Gold; Syria Fears Cause Yen to Beat Dollar
Stocks Fall on Syria Tension (Bloomberg)
U.S. stocks experienced their worst one-day decline in more than two months today, as investors the world over grew concerned about possible military intervention in Syria. “Everybody’s waiting to see what’s going to happen,” Randy Bateman, chief investment officer of Huntington Asset Advisors in Columbus, Ohio, said. “Is this going to escalate? Energy prices, if they rise a whole lot, could that mitigate all the strength we’ve been seeing lately in the economy? If we’ve got housing prices that start to rise at the same time we have food and fuel increasing, we could see inflation start to rise and that could impact Fed policy.”
Today’s slide in stocks saw investors look for financial shelter in other commodities, causing gold to rise one percent to its highest point in more than three months. “The possibility of U.S. military action against Syria is driving demand for safe-haven assets including gold,” said Jeffrey Sherman, commodities portfolio manager at DoubleLine.
Syria Fears Cause Yen to Beat Dollar (Reuters)
Currency investors’ fears about potential action in Syria caused them to put their capital in relatively safe currencies, like the yen and Swiss franc, lowering the relative value of the U.S. dollar. “It seems that today is a good old risk-off day due to Syria,” said Charles St-Arnaud, foreign exchange strategist at Nomura Securities in New York. “This explains why the yen has been outperforming the dollar and why the dollar has been outperforming most other currencies, especially the Australian dollar, New Zealand dollar and emerging market currencies,” he said.