North Korea tensions send dollar to eight-week low vs. yen

Traders said hedge funds had cut leveraged bets against the franc, prompted in part by worries about increased US-North Korea tension, though some analysts said gains may be overdone.

THE QUOTE: "Today's inflation data put the Fed on pause and really diminishes the fact that there's still some noise going around with the North Korea-U.S. situation", said Phil Blancato, CEO of Ladenburg Thalmann Asset Management.

Keeping up his tough talk, U.S. President Donald Trump told reporters that North Korean leader Kim Jong Un's government should "get their act together" or face the consequences, and suggested that his earlier threat to unleash "fire and fury" on North Korea was too mild. The stock fell $3.30 to $30.09.

France's CAC dropped 1.6 per cent and Germany's DAX fell 1.3 per cent.

Ralph Lauren gained $10.38, or 13.3 percent, to $88.53, while peer-to-peer loan company LendingClub added 99 cents, or 18.1 percent, to $6.45.

Gold futures prices GCZ7, +1.18% were up almost 1% to $1,273.80 per ounce.

The spot gold price was up 0.7% at $1,286.07 per ounce by 2pm GMT, after hitting an earlier high of $1,286.40, its highest level since June 8.

The Swiss franc was on track for its biggest single-day rise against the euro in more than 2 1/2 years.

"The weakness in gold abruptly ended later in the day as stocks turned south after President Trump issued a rather stern warning to the North Koreans", said INTL FCStone analyst, Edward Meir. For the week, the index lost over 3 percent to register its biggest weekly loss since February of 2016. The stock lost $2.80 to $9.04.

Sterling touched a three-week low against the dollar as a mixed bag of output and trade data did little to alter investors' downbeat view of an economy struggling to meet Bank of England targets.

OIL: Benchmark U.S. crude rose 23 cents to settle at $48.82 a barrel on the on the New York Mercantile Exchange. Brent crude, used to price global oils, was down 35 cents to $51.55 a barrel in London.

USA gold futures for December delivery climbed 1% to $1,291.80 per ounce. Britain's FTSE 100 was down 1.1 percent.

The euro dipped 0.1 per cent to $1.1733 but the single European currency has been slipping this week against the dollar, having hit a more than 2 1/2-year high of $1.1892 on August 2.

"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.

The technology sector was the biggest weight on the S&P 500 index with a 1.9-percent drop. Hong Kong's Hang Seng Index plunged by 2%, while South Korea's Kospi Index slumped by 1.7%. "If the rest of the world remains supportive, then there's reason in these earnings to be encouraged about the direction of the Japanese market, which has sort of been in a holding pattern for the past two months".

Bond prices fell. The yield on the 10-year Treasury note rose to 2.22% from 2.20% late Thursday.

Vanessa Coleman

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