Tension in North Korea continues to worsen without any hint of weakening, and Asian stocks have declined as countries try to figure out how to deal with Pyongyang. The largest MSCI index of the Asia-Pacific region outside Japan fell by 0.7 percent, while the Nikkei fell by 0.3 percent. Australian stocks fell 0.6 percent, while Hong Kong’s Hang Seng fell 1 percent. Futures for shares in the US fell slightly after the main indicators fell during the night, as well as due to the historically powerful hurricane heading to Florida. The dollar lost ground, especially against the yen and the Swiss franc, which reflects the risk appetite for wider markets.
Investors are eagerly awaiting the ECB’s announcement about the timing of the exit from its ultra-free monetary policy, and several experts expect the Fed’s tightening of monetary policy this month. The focus will be on whether the Fed will raise the US interest rate in December. The dollar also suffered after comments by Federal Reserve Governor Lael Brainard, who said that inflation had not reached its goal. The dollar fell 0.1 percent to the yen, losing about 0.9 percent per night, which is the biggest one-day drop in three months. The dollar index remained practically unchanged, reaching the level of 92,309 after falling by 0.4 percent on the previous day. The euro on Thursday was without any movement after the ECB meeting.
In commodities, gold was approaching yearly highs as the dollar weakened, and demand for safe haven assets remained strong due to geopolitical tensions on the Korean peninsula. Crude oil was trading lower compared to the previous day, and now the focus is on Hurricane Irma moving towards the Caribbean shipping routes.