Markets slide, dollar slumps as North Korea fears spike

Shares, Dollar Slip as US-North Korea Tensions Escalate

Shares, Dollar Slip as US-North Korea Tensions Escalate

The market's backstop safety asset, gold, edged up to its latest two-month high of $1,288 an ounce.

Trump warned North Korea again on Thursday not to strike Guam or US allies, saying his earlier threat to unleash "fire and fury" on Pyongyang if it launched an attack may not have been tough enough.

The pan-European benchmark on Wednesday fell 0.7% in a selloff prompted by tensions between the USA and North Korea escalated. "The U.S. president at a [golf] links again let out a load of nonsense about 'fire and fury, ' failing to grasp the on-going grave situation".

The yen tends to benefit during times of geopolitical or financial stress as Japan is the world's biggest creditor nation and there is an assumption that Japanese investors will repatriate funds should a crisis take place.

South Korean shares, which have been among the strongest performers in the world so far this year, fell 0.9 percent, while the won sank around 0.7 percent to 1,136.4 to the dollar.

"More likely than anything else, the price action was a function of an overextended USA equity market that has been in need for a healthy correction off record highs", LMAX Exchange analysts said in a morning note.

Markets are now awaiting USA consumer price data for July, due later today. Wall Street was poised for a soft opening with S&P futures and Dow futures both down 0.2 percent.

The Dow Jones industrial average closed up 14 points, a gain of 0.07 percent, the Nasdaq composite rose almost 40 points or 0.64 percent and the S&P 500 gained 3 points or 0.13 percent. The yield on the 10-year Treasury note slipped to 2.21 percent from 2.25 percent late Wednesday.

The S&P 500 dropped the most since May and MSCI's gauge of stocks across the globe lost 1.1 percent in its third straight day of declines.

European stock markets fell further in opening trade on Friday on intensifying fears over North Korea, dealers said.

Declining issues outnumbered advancing ones on the NYSE by a 2.29-to-1 ratio; on Nasdaq, a 2.47-to-1 ratio favored decliners.

"The direction in global equities will likely play a major role in the yen's direction today, while the market will also be interested to see what comes of US CPI data". The USD/JPY pair was trading at 110.072 Yen, up 0.13%.

The market was also waiting for United States inflation data on Friday that would offer clues about the extent to which the strengthening United States labour market is spilling over into inflation. It was on course for an over 5 percent weekly rise, its highest such gain since July 2016.

Ongoing global glut concerns lingered in oil markets despite a bigger-than-expected draw in U.S. crude inventories, leaving prices volatile. It was last up 1.2% at 1.1305 per euro.

USA crude fell 0.41 percent to $48.39 per barrel and Brent was last at $51.68, down 0.42 percent on the day.

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