US Stocks Slip as North Korea Tensions Persist

U.S. Dollar Index

U.S. Dollar Index

Nevertheless, the geopolitical uncertainty looks set to continue, dealers said, following Trump's fresh warning Friday that the U.S. military is "locked and loaded" in the event of a misstep by the totalitarian state.

Wall Street closed sharply lower last night after US President Donald Trump issued a new round of fiery rhetoric, warning Pyongyang against attacking Guam or US allies after it disclosed plans to fire missiles over Japan to land near the US Pacific territory.

The VIX measure for volatility was also up for the day, while the U.S. dollar was marginally down against sterling.

The figures inevitably reduce the chances of the Bank of England tightening monetary policy and therefore weakened the Pound Thursday against most other currencies, including the Swiss Franc. Traders there were also digesting a rise in jobless claims and the biggest drop in producer prices in 11 months.

Financial stocks underperformed after U.S. Treasury yields fell as bond prices rose in a flight to safety by nervous investors.

He added that in China, the US and South Korea, stocks that are showing the biggest declines since the rise of tensions between the USA and North Korea are the companies that have risen most since June.

"Heightened geopolitical risks overnight have seen the markets flip from risk-on to risk-off and we have to wait and see how long this move runs before adding some positions", said Viraj Patel, an FX strategist at ING in London.

A Reuters Datastream index of more than 7,000 stocks across the globe saw its market capitalization drop from a record high $61.36 trillion on Monday to $60.43 trillion at the close on Thursday.

"We believe continued sabre-rattling between the two nuclear powers could take gold prices higher still".

By the end of the day almost $1 trillion in equity had been lost globally.

Emerging market stocks lost 0.89 per cent. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.57 per cent lower.

Wall Street got off to a downbeat start early Thursday as tensions between the USA and North Korea continued to escalate, rattling markets overseas. Shanghai's main index also tumbled 1.6 percent to 3,208.54 while Australia's S&P/ASX 200 dropped 1.2 percent to 5,693.10.

Against the dollar the euro was 0.16 per cent lower.

Crude futures extended losses on fears of slowing demand and lingering concerns over a global oversupply meanwhile.

In currencies, the yen rose 0.8 percent versus the greenback at 109.2 per dollar JPY= , the strongest level for the Japanese currency since mid June.

OIL: Benchmark U.S. crude lost 12 cents to $48.47 per barrel on the on the New York Mercantile Exchange.

"If the data continues to come in on the softer side, the market might start to price the Fed staying on hold this year", said Sireen Harajli, FX strategist at Mizuho in NY.

Front month Comex gold for August delivery rose 0.84% to $1,283.70 per troy ounce on Thursday.

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