Dollar Climbs as North Korea, Hurricane Woes Wane: Markets Wrap

The Frankfurt Stock Exchange
Global Shares Return to Record High

12 September, 2017

The previous week saw a sell-off in risk assets sparked by Kim Jong-Un s nuclear test, in turn benefiting haven assets such as the yen and gold, which retreated Monday alongside a pick-up for the dollar.

In parallel, Erlam added that with Hurricane Irma now downgraded to category one, there was hope that the devastation wreaked by the storm would not be as bad as feared, potentially bringing down the eventual bill.

The stats had limited impact on risk appetite ahead of the European session however, with the U.S Dollar managing to find some much needed support and with Asian equities making solid gains, the Nikkei up 1.41% off the back of a weaker Yen, as the markets responded to the limited noise out of North Korea over the weekend, and in particular North Korea's decision to celebrate its Founding Day rather than mar it with another intercontinental ballistic missile test that would have undoubtedly raised tensions further. There was also relief among investors that a national holiday passed in North Korea without that country escalating tensions with the U.S.

Goldman Sachs' (GS.N) 1.8 percent rise led the Dow higher, followed by insurer Travelers (TRV.N), which rose 2.94 percent.

The S&P 500 gained 1.04% to 2,487.1 points, while the Nasdaq Composite added 1.11% to 6,430.77.

Also boosting pharma stocks was Teva (TEVA.N), which jumped 13 percent after naming a new chief executive.

US stock index futures climbed as Hurricane Irma came ashore in Florida weaker than anticipated and the perceived threat of a North Korean missile test failed to materialize.

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On Friday morning, projections indicated that it was likely Irma will take the "worst case scenario" path into the Sunshine State. The 2016 AP investigation is newly relevant as a massively powerful Hurricane Irma swirls toward Florida.

Trading was expected to remain quiet with no major US data to be released throughout the day.

"Insured losses (overall) are now expected to be less than many feared", Credit Suisse analysts said after the estimated insured loss in the United States resulting from Irma was cut to $20-40 billion. Royal Caribbean Cruises jumped $3.88, or 3.3 percent, to $121.33 and American Airlines gained $1.27, or 2.9 percent, to $44.87. The contract skidded $1.61, or 3.3 percent, to settle at $47.48 a barrel on Friday.

The dollar index, which tracks the USA unit against a basket of six major currencies, was 0.2% higher at 92.51, after skidding to a 2-1/2 year low of 91.011 on Friday. In corporate news, investors awaited the debut of Apple Inc.'s new iPhone 8 on Tuesday.

CURRENCIES: The dollar strengthened as the latest developments gave traders less reason to flee to the yen, traditionally considered a haven.

SPDR Gold Trust, the world's largest gold-backed exchange-traded fund, said its holdings fell 0.28 percent to 834.50 tonnes on Friday from 836.87 tonnes on Thursday.

ENERGY: Benchmark U.S. crude rose 19 cents to $47.67 a barrel in NY while Brent crude, used to price worldwide oils, fell 22 cents to $53.56 a barrel in London.

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