Risk aversion was seen across the global financial markets today after North Korean leader Kim Jong-il, 70, died on Dec. 17 of a sudden illness. Demand on safe haven intensified on fears of regional instability.
Sharp losses were seen across Asia today while in Seoul Kospi Index fell by 3.43% as Kim Jong-il death triggered worries about global growth and muted hopes for nuclear talks with theUS.
In South Korea alert levels were raised while the central bank was asked to step in if needed to stabilize financial markets, since the future of this communist country is uncertain and the impact on the region is unknown.
Kim Jong-il death brings an end to a 17-year reign during whichNorth Koreabuilt nuclear weapons, and the young and inexperienced Kim Jong Un, is believed to take overNorth Koreafrom his father, extending his family’s dynasty.
More downside pressures were seen today after Fitch warned of possible downgrades for 7 European nations, while the Euro-area finance ministers will meet today to talk about additional aid through the IMF.
Franceis set to sell 7 billion euros of bills today after Fitch reduced its credit outlook to negative from stable, saying the “country is more exposed to the region’s debt crisis than others”.
The US will lack fundamental data today, yet a report showed that the holiday season’s online sales jumped 15%.Europehowever released a disappointing construction output and positive current account report for Oct.
The euro is trading with some bearish momentum around the 1.3025, while the pound is trading around the 1.5495 level after the USD rose slightly trading now around the 80.20 level as cautions is prevailing.
The yen is trading around the 77.90 level. The AUD fell as investors were avoiding the high yielding assets trading around the 0.9950 level. The CHF is stringer today as demand on safe haven widened, trading around 0.9350.
As the USD was stronger and euro weaker commodities are mixed with gold loosing some of its gains and is trading as of this writing around the $1595.55 per ounce, while oil is trading around the $94.10 per barrel level.