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

Paterniano Del Favero
Agosto 12, 2017

Even with relative market calm, the geopolitical tensions appeared to be no closer to easing on Thursday, as North Korea waged a war of words with U.S. President Donald Trump.

Trump ratcheted up his rhetoric against North Korea and its leader on Thursday, warning Pyongyang against attacking Guam or U.S. allies after it disclosed plans to fire missiles over Japan to land near the U.S. Pacific territory. We would like to recommend buying gold at the current price and more so at correction.

Gold rose 0.6% to $1,268 (£976) an ounce and platinum gained 0.6% to reach $972.95 an ounce, having hit its highest since April at $979. "So we're not going to get to a year-over-year number of 2-percent until some of these very low readings drop out of the statistics 6 to 10 months from now".

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 there will repatriate funds should a crisis materialize. It since drifted back towards the $1.17 level before being pushed up by weak USA data.

The Canadian dollar edged higher on Thursday against its US counterpart, recovering from an earlier near four-week low as higher oil prices offset U.S. Monthly, the same figure fell 0.5% coming in well below expectations of a 0.3% gain. Industrial output in the United Kingdom rose by 0.5% month-on-month in June, beating expectations of a 0.1% increase.

These have ranged from an investigation into Russia's possible interference in the 2016 U.S. presidential election, to concerns about China's risky debt levels, to stubbornly low inflation in the US.

The Korean won also continued to skid, sliding 0.4 percent to 1,146.2, below its 200-day moving average.

Sociedad Quimica y Minera de Chile, one of the world's largest producer of iodine - a substance used to combat radiation - has seen its share price increase by over a third since the start of July. Excluding food and energy components, PPI was also down 0.1% m/m in July, while the annual rate moderated to 1.8% from 1.9%, missing forecasts of 2.1%.

Weekly Unemployment Claims rose unexpectedly by 224K.

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.

Jobless claims increased to 244,000 in the latest week, although continuing claims declined. WTI crude was up 0.3% at $49.72 a barrel in late European session, while Brent crude was 0.8% firmer at $53.13 a barrel.

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