Nuclear Tests

Safe haven currency funds have been gaining a lot of traction lately, owing to rising geopolitical concerns. North Korea has been continuously testing missiles to develop a nuclear program in order to safeguard itself from potential U.S. invasion, per North Korean leader Kim Jong-Un.

North Korea conducted its sixth nuclear test, that of a hydrogen bomb, which can be mounted on an Inter Continental Ballistic Missile, on September 3, 2017. Not only did it trigger an artificial earthquake of magnitude 6.3 but also rattled the markets, with Asian stocks falling while yen and gold surging.

Only a few days ago North Korea had launched a missile that flew over the Japanese airspace. U.S. President Donald Trump has been continuously suggesting that Kim Jong-Un’s threats will be met with military actions if he threatens to harm the U.S. territories or any of its allies (read: Defensive ETFs to Tackle Weak Job Data, North Korea Tensions).

UN Sanctions

The UN termed this action by Pyongyang as outrageous and the US ambassador to the U.N., Nikki Haley, responded that North Korea is “begging for war” and urged the U.N. to impose strictest sanctions on the rogue nation.

Although China backed UN sanctions against North Korea, it is of the view that North Korea’s economic downfall would greatly affect its financial health. However, Russia is of the opinion that further UN sanctions might do more harm than good and further escalate the issues in the region.

Military Defenses

Moreover, Trump and South Korea’s Moon Jae-In have agreed to show their military potential to North Korea in case a military conflict arises. Trump’s Japanese counterpart, Shinzo Abe has vowed to strengthen its military defense systems (read: North Korea’s Nuclear Test Drives Safe Haven ETFs Higher).

Let us discuss a few currency ETFs impacted by the rising geopolitical risks relating to North Korea (see all Currency ETFs here).