Published: Sat, August 12, 2017
Economy | By Guillermo Lane

Dollar slumps, Tokyo tanks as North Korea tensions spike

Dollar slumps, Tokyo tanks as North Korea tensions spike

"The most visible impact of escalating verbal threats between North Korea and President Trump comes at the long end of the U.S. Treasury curve", said Jim Vogel, interest rates strategist at FTN Financial in Memphis. The remarks were made by presidential Blue House spokesman Park Su-hyun in a media briefing after the standing committee of the Blue House's National Security Council held a regular meeting to discuss recent events.

Just hours after U.S. President Donald Trump told North Korea that any threat to the United States would be met with "fire and fury", a spokesman for the Korean People's Army said in a statement carried by the North's state-run KCNA news agency that it was considering a strike aimed at U.S. military bases on Guam.

Nvidia fell $7.37, or 4.3 percent, to $164.74, while Advanced Micro Devices gave up 71 cents, or 5.5 percent, to $12.12.

Outside of geopolitical concerns, disappointing company earnings and outlooks put traders in a selling mood.

Dean Foods Co.'s stock plunged 21 percent after reporting earnings in the second-quarter that were way below investors' expectations. In turn, Wells Fargo, Jefferies, and Telsey cut their price targets for FOSL, which is down 22% in electronic trading, and could hit a multi-year low.

Major stock indexes overseas also racked up losses Thursday.

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Benchmark U.S. crude fell 97 cents, or 2 percent, to $48.59 a barrel on the New York Mercantile Exchange. Brent crude, used to price global oils, gained 10 cents to $52.24 in London. Netflix also fell, giving up $2.58, or 1.4 percent, to $175.78. December Comex gold settled the day up 1% at $1,279.30 an ounce while September Comex silver settled at $16.863 an ounce, up more than 2% on the day.

In other energy futures trading, wholesale gasoline was little changed at $1.62 a gallon, heating oil rose 2 cents to $1.65 a gallon and natural gas rose 6 cents to $2.88 per 1,000 cubic feet.

Some traders said foreign investors had already been looking for a reason to take profits after the benchmark index had climbed almost 20 per cent so far this year. Natural gas gained 2 cents to $2.82 per 1,000 cubic feet. The stock lost $142.20 to $1,906.80. The FTSE 100 index of leading British shares declined 0.6 percent. The euro fell to $1.1749 from $1.1752. MSCI's broadest index of Asia-Pacific shares outside Japan closed 0.63 percent lower, while Japan's Nikkei lost 1.29 percent. Australia bucked the trend with a 0.4% gain.

While North Korea is likely to remain in focus, a report on consumer price inflation may also attract attention on Friday, with consumer prices expected to rise by 0.2 percent in July.

The U.S. dollar fell to 110.48 yen from 110.72 yen late Monday.

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