Escalating tensions between North and South Korea temporarily a blow to the euro. At the moment it looks like a saber-rattling, not preparations for war, and now markets it as it embraced.
This added to the general mood of risk aversion, which is dominated on Monday, along with a decrease in Asian markets and higher-yielding currencies on the forex market. As we mentioned in our review of the day, these factors may retain their effect until the end of the year. Reduction in liquidity, combined with falling volume of orders in December, means that we will have many more days, similar to yesterday (albeit with less dramatic drop in the euro) and this should be in favor of the USD.
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