The UK's stock market has opened lower as worries over the situation between the U.S. and North Korea continue to rattle investors.
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 sell-off is likely to extend into the European session today, with financial spreadbetter CMC Markets expecting Germany's DAX and France's CAC 40 to open down about 0.7% each and Britain's FTSE 100 to start 0.55% lower. Hong Kong's Hang Seng Index plunged by 2 percent, while South Korea's Kospi Index slumped by 1.7 percent. Additionally, China weighed in on the standoff, saying in an editorial in state-run Global Times that Beijing will intervene if the USA strikes first against North Korea. The statement has dominated the headlines, and is one of the main drivers in the markets.
Gold prices held steady after touching their highest in over two months on Friday and were on track for a weekly gain, buoyed as rising tensions between the United States and North Korea triggered safe-haven buying.
The yen is perceived as a safe haven because Japan is the world's biggest creditor country and investors there have tended to repatriate funds in times of crisis.
The euro was down 0.4 per cent at just over $1.17 and nearing a two-week low, while the New Zealand dollar tumbled a full one per cent as its central bank head bluntly said he wanted it lower.
"North Korea will blow over and given the sentiment, we could see a rally back to new highs" by the end of next week, Michael Block, chief market strategist at Rhino Trading Partners, wrote in a report on Friday. Japan was closed on a public holiday. The index is bouncing off its lowest closing level in six months.
The market was waiting for United States consumer inflation data on Friday that would offer more clues about future Fed decisions.
News that US producer prices unexpectedly fell in July earlier helped send the dollar lower.
Market participants are also nervous about escalating tensions between the US and North Korea. "But now, tensions climb rather than decrease", says Michael Currie, vice president, investment advisory at wealth Management TD. Both the Nasdaq and the Russell are set for their third straight weekly decline. The S&P 500 hasn't pulled back by 5% or more since June 2016.
Benchmark 10-year notes last rose 7/32 in price to yield 2.1888 percent, from 2.211 percent late on Thursday.
Ongoing global glut concerns lingered in oil markets despite a bigger-than-expected draw in US crude inventories, leaving prices volatile. September West Texas Intermediate crude fell $0.97, or 2%, to $48.59 a barrel on the New York Mercantile Exchange.