Dollar at eight-week low vs yen as North Korea tensions simmer
Sterling falls as United Kingdom inflation stays flat at 2.6 per cent
Bitcoin hits new all-time record high and goes above $4300
Asia stocks extend rally as North Korea fear recedes
TSX rallies shortly after open as North Korea tensions ease
OPEN: Lower Call On North Korea Threat; Gold Falters
12 Agosto 2017, 07:14 | Dolorita Barahona
Asian and US equities were hit by the escalating geopolitical tensions
"Looking historically, there's relatively little volatility when it comes to stock market and North Korean provocations", said Kent Boydston, a research analyst at the Peterson Institute for International Economics.
Marco Rubio, a member of the Senate foreign affairs committee, defended President Donald Trump's stark warning to North Korea in a series of tweets Thursday morning.
"The war of words taking place between the U.S. and North Korea at the moment, which includes very real threats of action, is taking its toll on investor sentiment". North Korea threatened a missile strike at US territory Guam. An actual military strike by North Korea on an American target would have economic as well as geopolitical repercussions, Boydston said. "Hopefully Kim Jong Un will find another path!" The U.S. dollar was down 0.3% at 110.01 yen which hurt the share prices of motor-vehicle makers, technology companies and banks.
The financial index had risen earlier in the session after the Labor Department said USA job openings, a measure of labor demand, jumped to a record high in June to the highest level since December 2000. Economists had expected prices to rise by 0.2 percent. In particular, July headline inflation came in at 0.1% month-month in July, falling short of expectations for CPI growth to stand at 0.2% - still this was better than June's 0.0%.
Offsetting the declines was a 0.4 percent gain by the materials group, which includes gold producers. With the sell-off on the day, the Nasdaq and the S&P 500 fell to their lowest closing levels in a month.
On Friday, the S&P 500 rose 3.11 points, or 0.1 percent, to 2,441.32.
"Tensions will continue to mount and could eventually develop into a "black swan" event that the markets are not prudently considering", Steve Hanke, professor of Applied Economics at the Johns Hopkins University, told the Reuters Global Markets Forum on Wednesday.
Tokyo's Nikkei 225 share index fell 1.3 percent to its lowest since June 1, while South Korea's KOSPI index plunged 1.1 percent to seven-week lows. The Japanese markets were closed for a holiday.
The positive data also bolstered the greenback against the euro and the pound Wednesday.
As of 12:20 BST, the FTSE 100 index had lost 83 points to stand 1.12 percent lower at 7,306.94, staying on track to post a near three-percent loss for the week.
United States crude rose 0.69 per cent to US$49.51 per barrel and Brent was last at US$52.66, up 1 per cent on the day. The war of words between Washington and Pyongyang saw the price of gold rise to $1,278.49 this morning with future gold for December delivery up 1.3% at $1,279.30.
On the currency markets, the pound was down to a three-week low against the USA dollar but mainly due to earlier disappointing output and trade data. Against the euro, the dollar is valued at $1.826 compared to yesterday's $1.1772.
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