Dollar and South Korean Won Slip Amid North Korea Tensions

Marco Green
August 12, 2017

Also weighing on the greenback was continued geopolitical uncertainty, after North Korea ignored President Trump's earlier warning that further threats will be met with "fire and fury", prompting investors to flee risky assets in search of safe havens like gold and the yen.

Trading was thinner than usual, with Japanese markets closed for a public holiday.

The UK blue-chip index fell 80 points, or 1.1%, to 7,417, and is now down 128 points over the last two sessions, as the standoff between the U.S. and North Korea has escalated.

North Korea has announced a detailed plan to launch a salvo of ballistic missiles toward the U.S. Pacific territory of Guam, a major military hub and home to U.S. bombers, a move that if carried out would be its most provocative missile launch to date. It was down 0.1 percent at 109.07 yen, after retreating 0.8 percent on Thursday.

Chinese bluechips lost 1.6 percent, while Hong Kong's Hang Seng was 1.9 percent lower.

Wall Street closed lower: The Dow Jones Industrial Average fell 0.17 per cent to close at 22,049 the S&P 500 fell 0.04 per cent to close at 2,474 and the NASDAQ slipped 0.28 per cent to close at 6,352.

However, U.S. stocks recovered temporarily late on Wednesday as investors appeared to brush off the geopolitical concerns following encouraging comments from Secretary of State Rex Tillerson.

The yield on USA 10-year Treasurys slid to 2.199% Friday from 2.211% Thursday.

Gold added $3.90 to settle at $1,294 an ounce.

Historical
Shares slip, yen and gold gain as Korea tensions escalate

The market slide accelerated slightly in the last half-hour of trading as Trump denounced North Korea's nuclear program.

In 3.28pm trading in NY, the Dow Jones Industrial Average fell 0.15 per cent, while the Nasdaq Composite Index declined 0.18 per cent.

Meanwhile, initial claims for state unemployment benefits increased 3,000 to a seasonally adjusted 244,000 for the week ended August 5, the Labor Department said on Thursday.

"What we're seeing today is political tensions over North Korea and the United States. making people nervous", said Robert Pavlik, chief market strategist at Boston Private Wealth in NY. "North Korean tensions continue to escalate", leaving the Swiss Franc, and possibly the US dollar, as the remaining beneficiaries of risk aversion, Emmanuel Ng, currency strategist at OCBC Bank in Singapore, wrote in a note.

US stocks have risen week after week this year - with the S&P up more than 9 per cent - in extremely low volatility, as strong corporate earnings and an improving global economy offset disappointment that US President Donald Trump's promises to lower corporate taxes and implement a massive infrastructure spending have so far failed to see the light of day. Rival Advanced Micro Devices was also down 2.6 percent.

Global benchmark Brent also lost 0.9 percent to $51.44, after Thursday's 1.5 percent drop. Dollar" and there is the "U.S.

Barrick Gold Corp rose 2.1 percent to C$21.7, while Goldcorp Inc rose 0.9 percent to C$16.29.

In commodities trading, United States crude oil was wallowing around $49 to the barrel amid speculation that a predicted gain in American output will offset OPEC-led efforts to trim a global glut. It is poised to end the week down 1.9 per cent.

Other reports by Click Lancashire

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