Brexit turmoil continued to engulf markets. In currency markets, the US dollar rally against major currencies in the aftermath of Brexit was significant as investors are scouting for safe haven assets. The British pound was down to a 30 year low. The pound fell to $1.3208 after Friday’s 8.1 percent plunge.
The dollar index tracking the greenback against six major currencies jumped 1.16 percent at 96.559 in late trading.
Under the dollar rally, late New York trading on Monday euro was pulled down to $1.1019 from $1.1144 of the previous session. British pound plummeted to $1.3192 from $1.3696. The Australian dollar fell to $0.7343 from $0.7508 against US dollar.
The US dollar to yen closed at 101.99 yen. “People are finding it difficult to comprehend what Brexit implies for the future — we don’t know yet what the magnitude of the shock will be,” Steven Barrow, head of the strategy at Standard Bank Group in London told Bloomberg.
Contrasting the dollar rally had MSCI Emerging Market Currency Index falling 0.7 percent after dropping 1.3 percent on Friday.
Gold Up
The post–Brexit turbulence seems to have opened up good times for safe haven assets like gold. On Monday, gold prices made substantial gains. It was a bonanza for gold, as the yellow metal consolidated gains at the futures market in New York with a two-year high price.
In the afternoon trade, gold futures on the Comex market for August traded at $1,327.80 an ounce, up $5.40 from Friday’s close. On Friday, gold hit an intra-day high of $1,362.60, marking the peak since July 2014.
Gold’s appeal as a safe haven asset has been bolstered by the Brexit that left investors scurrying for safety as bond yields collapsed and volatility in equity and currency markets widened, reports Mining Weekly.
According to analysts, the gold price will gain more, soaring above the psychological level of $1300.00. Trading above 1317.00 will help further attempts to rise, reports Investing.com.
It said the breakthrough price of 1332.00 is a proof of the bullish intraday direction. The expectation is that bullish positions above 1317.00 will trend towards 1365.00 and above.
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