Tuesday, right after North Korea launched a missile that passed over northern Japan, the United States dollar collapses to a four-month low against its Japanese counterpart, the yen. The devastation left by Hurricane Harvey at Houston, Texas has also weakened the dollar.
The greenback went lower by 0.55% and traded at 108.660 yen right after touching 108.330 which is considered as its lowest point since April 18, 2017. The dollar index kept stable at 92.274 after falling to as lows as 92.137, the weakest point since May 2016.
Based on past patterns, investors immediately react to crises in the Korean Peninsula by going long on the Japanese yen considering it a safe haven.
Fuel prices in the United States were boosted by the devastating effects of Hurricane Harvey on Monday, as approximate 13% of the refineries in Texas were shut down. U.S. made gasoline soared on the first trading day. Gasoline futures RBc1 leaped by as much as 7% and traded at $1.76 a gallon reaching its highest point since July 2015.United States National Weather Services warned that Harvey had swung back over the Gulf of Mexico on Monday and was expected to pour another 10 to 15 inches of rain in the Houston area. This may have further effect on oil prices and on the US dollar.