(Bloomberg) -- Haven assets rallied after House Speaker Nancy Pelosi said the chamber is opening a formal impeachment inquiry of President Donald Trump.
Benchmark 10-year Treasury yields dropped as low as 1.63%, the lowest since Sept. 10, and the yen strengthened as much as 0.6% to a daily high of about 107 per dollar as investors sought shelter. The S&P 500 Index fell 0.8%.
The inquiry's launch came after Trump said he'll release the transcript of a July phone call with Ukraine's president, which is the subject of a congressional investigation and a whistle-blower complaint from an unidentified intelligence official.
“The impeachment headlines are contributing to modest weakness in risk markets by mining into a new shaft of uncertainty,” said Shahab Jalinoos, global head of foreign-exchange trading strategy at Credit Suisse. “Markets are pricing in, as of now, a marginal amount of extra risk premium.”
The Bloomberg Dollar Spot Index fell 0.2%.
“The key is that the Senate is unlikely to uphold unless base Republicans decide to abandon Trump -- which they likely won't,” wrote Bipan Rai, North American head of foreign-exchange strategy at CIBC, in an email. “This feels like a tactical move to sell USD and buy the havens.”
To contact the reporter on this story: Katherine Greifeld in New York at kgreifeld@bloomberg.net
To contact the editors responsible for this story: Benjamin Purvis at bpurvis@bloomberg.net, Mark Tannenbaum
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