Yen and chf gain on safe-haven buying due to rising U.S.-North Korea tensions: Aug 10, 2017

Market Review - 09/08/2017   23:27GMT  

Yen and chf gain on safe-haven buying due to rising U.S.-North Korea tensions

The greenback dropped against majority of its peers especially versus the safe-haven yen and the Swiss franc on Wednesday on broad-based risk aversion due to mounting tension between U.S. and North Korea.

Earlier in the day, CNBC reported citing source from KCNA that North Korea is considering strike on Guam with intermediate range missile. The strike plan would be put into practice at any moment once leader Kim Jong Un makes a decision, a spokesman for the Korean People's Army (KPA) said in a statement carried by the North's state-run KCNA news agency.

Versus the Japanese yen, dollar tumbled ahead of Asian open and hit 109.74 in Asian morning before staging a recovery. However, renewed selling at 110.08 ahead of European open knocked price to a fresh 7-week low at 109.56 at New York open on risk-averse buying of yen. however, the greenback quickly pared intra-day losses and staged a short-covering rebound to 110.16 and later moved broadly sideways in New York afternoon.

The single currency retreated to 1.1719 in Asian morning due partly to cross-selling of euro vs yen and sterling before staging a rebound to 1.1762 in early European morning. However, price met renewed selling there and briefly dropped to session lows of 1.1689 in New York morning before rebounding swiftly on short covering to 1.1761.

Although the British pound rose from Asian low at 1.2969 to session high at 1.3030 (Reuters) at European open on cross-buying of sterling especially vs euro, price pared its gains and then retreated to 1.2971 in New York morning before ratcheting back to 1.3011 ahead of the close.

In other news, U.S. Secretary of State Tillerson said 'Trump sending strong message to North Korea in language Kim Jong Un would understand; tells reporters North Korean leader does not understand diplomatic language; Trump wanted to deliver message to North Korea to avoid any miscalculation by Pyongyang.'

Data to be released on Thursday:

New Zealand interest rate decision, monetary policy statement, press conference, U.K. house price balance, manufacturing output, industrial output, goods trade balance, Japan CGPI, machinery orders, tertiary industry index, France industrial output, Italy trade balance, Canada new house price index, and U.S. PPI, core PPI, Fed budget.