Gold and yen rise on safe haven demand after Fed holds rates

The dollar was sold off after the Federal Reserve decided not to raise rates at a policy meeting on Thursday. The Fed’s concerns about slowing growth in China and low inflation in the U.S. meant it was not time to start raising interest rates.

The news led to risk aversion and brought the safe havens back into play, especially lifting the yen and gold.
Gold hit a two-week high of $1,136 per ounce and last stood at $1,128.50.

The dollar index against a basket of major currencies was little changed at 94.559 on Friday, having fallen to a three-week low of 94.360 on Thursday.

The euro jumped to a three-week high of $1.14415 on Thursday before easing to $1.1403 while the British pound also hit a three-week high of $1.5628 before retreating a tad to $1.5575.

The yen also edged up 120.12 to the dollar from Thursday’s low at 120.995.

Longer-dated U.S. debt yields plunged, with the two-year note yield dropping to 0.682 percent, returning to its familiar range only a day after it hit a 4-1/2-year high of 0.819 percent.

Commodity prices were relatively well-supported with U.S. crude futures last trading at $46.77 per barrel, down slightly from Thursday’s high of $47.71 but still up almost 5 percent on the week.

The post Gold and yen rise on safe haven demand after Fed holds rates appeared first on Forex Circles.

Source:: Gold and yen rise on safe haven demand after Fed holds rates