Dollar hits eight-week low vs. yen, North Korea tensions spook investors

Marco Green
August 13, 2017

Both the Swiss franc and the yen have climbed against the dollar this week, after U.S. President Donald Trump warned North Korea that it would face "fire and fury" if it threatened the United States.

The dollar index, which tracks the greenback against six rival currencies, edged higher after Dudley's comments and was up 0.03 percent to 93.577.

The influential financial stocks were among the biggest drags on the index, with Royal Bank of Canada down 1.5 percent to C$92.88, and Manulife Financial Corp falling 4.7 percent to C$24.43, its largest drop since early August a year ago.

The Swiss franc gave up some gains (http://www.marketwatch.com/story/swiss-franc-gives-up-some-gains-as-investors-monitor-us-north-korea-standoff-2017-08-10), as the USA dollar was flat across the board. It outlined detailed plans for a missile strike near US territory Guam.

US crude oil futures settled almost 2 percent lower at $48.59 a barrel, as Russian Federation considered a future output resumption and the Organization of the Petroleum Exporting Countries boosted its July production numbers.

Emerging market stocks lost 1.08 percent.

In Japan, the Nikkei 225 was down 1.29% at 19,738.71, as the yen gained on the dollar, last moving ahead 0.43% to JPY 109.85.

On Thursday, New York Fed President William Dudley said he expects sluggish USA inflation to rise over the next several months while the hot labor market gets even hotter. While the French CAC 40 Index fell by 0.6 percent, the German DAX Index slumped by 1.1 percent and the U.K.'s FTSE 100 Index plunged by 1.4 percent. Japan is the world's biggest creditor country and there is an assumption investors there will repatriate funds in a crisis. The common currency had lost about 0.4 percent overnight after news USA job openings surged to a record in June reinforced Friday's robust payrolls data and supported the greenback.

Switzerland's franc on Wednesday posted its biggest single-day rise against the euro since the central bank removed its cap on the currency in January 2015.

Ralph Lauren Corp. shot up 13.3 percent after reporting a net income of $59.5 million in earnings through July 1, up from a loss of $22.3 million in the year-ago period.

Brian Nick, chief Investment Strategist for TIAA Investments, which has $938 billion in assets under management said few catalysts remain to push stocks higher after earnings season is near wrapping up, which may give added significant to concerns about unease between North Korea and the U.S.

Prices did recover during early European trading, however, as Brent crude was last up 0.48% at $52.39 per barrel and West Texas Intermediate 0.49% higher at $49.41. It had recorded gains the past 10 days, CNBC reported.

Across the Tasman Sea, New Zealand's S&P/NZX 50 added 0.2% to 7,799.64, led higher by local cargo giant Mainfreight, which was 1.8% firmer. The tech-heavy Nasdaq composite lost 2.1 percent to 6,216.87.

Other reports by Click Lancashire

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