North Korea Missile Shakes Markets

World stock markets spiralled lower on Tuesday after North Korea fired a ballistic missile over Japan, deepening geopolitical worries but sending the euro and gold hurtling higher. Pyongyang fired the missile over Japan and into the Pacific Ocean, in a major escalation that triggered global alarm and a furious response from Tokyo.Investor (LSE: 0NC5.L – news) sentiment was also battered by monster storm Harvey in Texas, where it swamped streets and highways with unprecedented rainfall.”The combination of North Korea’s missile launch and the devastating impact of Harvey is weighing on risk appetite today,” OANDA analyst Craig Erlam told AFP.”Any increase in geopolitical risk, particularly involving North Korea, triggers a move to safety in markets as investors become increasingly concerned about the potential for things to escalate rapidly.”The damage caused in Houston is also weighing on sentiment, due to both the sheer devastation it has caused and the uncertainty over the cost and economic impact.”

“Euro/dollar has hit its highest level since the first trading day of 2015 today and broken through the psychological $1.20 level along the way,” added Erlam.”It seems geopolitical risk and the devastation in Houston have turned people away from the dollar.”

Source: N.Korea missile stuns global markets

CAC Slides as Euro Climbs, Korea Jitters

Gold and Silver Liftoff as Dollar Dumped and North Korea Tests

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam

Senior Currency Analyst at OANDA
Based in London, England, Craig Erlam joined OANDA in 2015 as a Market Analyst. With more than five years' experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while conducting macroeconomic commentary. He has been published by The Financial Times, Reuters, the Wall Street Journal and The Telegraph, and he also appears regularly as a guest commentator on networks including Sky News, Bloomberg, CNBC and BBC. Craig holds a full membership to the Society of Technical Analysts and he is recognized as a Certified Financial Technician by the International Federation of Technical Analysts.