[Money Flowing into Safe Assets] Stock Market and Crypto Plunge... Into the Crossfire of Ukraine

[Asia Economy New York=Special Correspondent Joselgina, Reporter Jo Hyun-ui] As fears of war surrounding Ukraine intensify, global financial markets are collectively shaking.

As investors rapidly flock to safe-haven assets, international gold prices surpassed $1,900 for the first time in eight months, while the Japanese yen and Swiss franc surged to their highest levels in the past two weeks. Conversely, risk assets such as major country stock markets and Bitcoin slid one after another.

On the 17th (local time) at the New York Stock Exchange, the Dow Jones Industrial Average closed down 1.78% compared to the previous session. This is the largest drop so far this year. The S&P 500 and Nasdaq indices also fell by 2.12% and 2.88%, respectively.

The impact continued in Asian markets, with the KOSPI index down 0.99% as of 9:50 a.m. Korean time on the 18th compared to the previous trading day. At the same time, the KOSDAQ index also dropped 0.80%. In Tokyo's stock market, the Nikkei 225 index opened trading down 1.19% from the previous day. Bitcoin, a representative virtual asset, fell 8.2% from the previous session, putting the $40,000 level at risk.

Conversely, the safe-haven U.S. dollar strengthened, pushing the won-dollar exchange rate higher. At the same time in the Seoul foreign exchange market, the won-dollar exchange rate recorded 1,198.2 won, attempting to break through the 1,200 won level.

In the New York foreign exchange market, the Dollar Index, which measures the value of the dollar against six major currencies, rose 0.13% from the previous session to 95.83. Strengthening of the yen and Swiss franc was also confirmed. The yen appreciated 0.50% against the dollar compared to the previous session.

Gold prices hit their highest level since June last year. At the New York Mercantile Exchange (NYMEX), April delivery gold closed at $1,902 per ounce, up 1.6% ($30.50) from the previous session.

This is interpreted as a result of the rapidly heightened war fears due to shelling between government forces and rebels within Ukraine. As Russia, which has supported the rebels in the Donbas region, is widely expected to use this shelling as a pretext for invading Ukraine, safe-haven asset preference surged. U.S. President Joe Biden warned that the threat of a Russian invasion of Ukraine is "very high" and that "an invasion could happen within days."

Joe Manimbo, Senior Market Analyst at Western Union Business Solutions, said, “Hope for diplomatic negotiations regarding the Ukraine situation is fading,” adding, “Investor sentiment is moving toward safe-haven assets.”

Meanwhile, despite geopolitical tensions surrounding Ukraine, international oil prices closed at $91.76 per barrel, down 2.03% from the previous session, as the possibility of a nuclear agreement (JCPOA - Joint Comprehensive Plan of Action) between Iran and the West increased. Craig Erlam, Senior Market Analyst at OANDA, said, "The oil market is very tight," adding, "If it weren't for the Iran nuclear deal negotiations, oil prices would already be in triple digits."