Aug 9 (Reuters) – Most Asian currencies stumbled on Wednesday with the Korean won destined for its biggest fall in nearly eight weeks as North Korea warned it is “carefully examining” plans for a missile strike on the U.S. Pacific territory of Guam.
The won was trading down 0.6 percent at 1134.8 at 0556 gmt. KRW=
North Korea’s reference to an attack on Guam followed
after President Donald Trump said the U.S. would respond to threats from North Korea with “fire and fury”.
“We have been down this road before, until the fireworks happen it will remain in the headlines, but in the past the markets have faded these types of moves. I think we have to be really sensitive to both liquidity conditions and further headline risk over the next 24 hours,” said Stephen Innes, Head of Trading APAC at OANDA.
“China basically buttresses the North Korea economy from top to bottom. We are going to have international pressures from the U.S. and all the developed-world leaders who see this escalating a bit too far. I think there is going to be pressure on China to make some serious economic sanctions towards North Korea until they give up the plot of military escalation.”