“Farce reigns and risk aversion rises. Yen up, euro down.”
That’s from SocGen strategist Kit Juckes and it just about sums it up.
The farce of course is what’s going on (again) in the U.S. Congress, and the situation in Italy, where Berlusconi (again) is threatening to screw everything up.
Risk aversion is just that, investor inclination to exit risky assets.
The euro is likely to come under pressure due to Berlusconi. And the Japanese yen (which faces none of the nonsense right now in Europe or the U.S.) goes up.