CURRENCIES: Swiss Franc Gives Up Some Gains As Investors Monitor U.S.-North Korea Standoff

By Barbara Kollmeyer, MarketWatch Features Dow Jones Newswires

Dollar ticks higher across the board

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The Swiss franc gave up some of its safe-haven gains on Thursday as investors continued to watch the standoff between the U.S. and North Korea, while the dollar regained its composure across the board.

The dollar moved up to $0.9665 against the Swiss franc, from $0.9636 late Wednesday in New York. The Swiss currency rallied around 1% on Wednesday, as investors flocked to assets perceived as safe in times of economic or geopolitical uncertainty.

That flight to safety also helped lift the Japanese yen and gold prices, after North Korean leader Kim Jong Un made an explicit threat to strike a U.S. military base in Guam on Wednesday.

The tensions appeared to be no closer to easing on Thursday, as North Korea waged a war of words with U.S. President Donald Trump. "Sound dialogue is not possible with such a guy bereft of reason and only absolute force can work on him," said North Korean state media on Thursday, according to the BBC (http://www.bbc.co.uk/news/world-asia-40883372). The Asian country also detailed plans (http://www.marketwatch.com/story/north-korea-details-plan-to-fire-missiles-toward-guam-says-only-absolute-force-will-work-with-trump-2017-08-09) for a missile strike on Guam.

The U.S. dollar was clawing back some ground, a sign that markets are settling down after the geopolitical shock, said Richard Perry, market analyst at Hantec Markets.

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"The big caveat to that is that the players are so inexperienced in this game of foreign policy that their bravado could stumble into a conflict situation," he said in a note.

The ICE dollar index moved up to 93.750, a gain of 0.2%, as the currency rose across the board. Against the yen, the greenback traded at Yen109.96, slightly below Yen110.06 late on Tuesday.

The euro dipped to $1.1721, compared with $1.1760 late Wednesday in New York. The pound eased to $1.2967, from $1.3004.

Those currencies have largely traded sideways in the past 48 hours, noted Konstantinos Anthis, on the ADS Securities research team.

"The fact that both European currencies have not been hit harder by the U.S./ North Korea situation, indicates that there is substantial fundamental backing behind them. It seems that investors feel more comfortable having their money in euros -- or even pounds -- rather than buying the U.S. dollar," said Anthis in a note to clients.

On the data front for Thursday, U.S. investors will get weekly jobless claims and producer prices for July at 8:30 a.m. Eastern. The Federal budget for July is due at 2 p.m. Eastern.

Meanwhile, New York Fed President William Dudley will speak on wage inequality in the New York region at 10 a.m. Eastern.

(END) Dow Jones Newswires

August 10, 2017 04:26 ET (08:26 GMT)