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Swiss franc surges as Korea tensions rise

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A street sign for Wall Street is seen outside the New York Stock Exchange in Manhattan New York City

Barrick Gold Corp rose 2.3 percent to C$21.74 as the price of gold, a safe-haven asset, reached its highest levels in two months.

Despite the spike, broader market volatility was broadly muted with a gauge measuring expected equity market swings holding well below a May high of 15.5, suggesting further gains may be hard.

"Dollar/yen has already gone below 110.00 yen, and at this stage we are likely to see the pair begin to bottom out as the market finds time to assess the situation", said Kyosuke Suzuki, director of forex at Societe Generale in Tokyo.

U.S. President Donald Trump threatened to meet North Korean nuclear tests "with fire and fury".

Terrified by the fireworks over North Korea?

The pan-European FTSEurofirst 300 index .FTEU3 lost 1.11 percent.

Meanwhile, market bellwether Samsung Electronics Co. backtracked 0.65 percent, and top automaker Hyundai Motor was down 0.34 percent.

North Korea also laid out detailed plans of how it would launch a missile strike on USA military bases in Guam (http://www.marketwatch.com/story/north-korea-details-plan-to-fire-missiles-toward-guam-says-only-absolute-force-will-work-with-trump-2017-08-09).

Spot gold added 1.3 per cent to US$1,277.15 an ounce.

The CBOE Volatility Index, better known as the VIX and the most widely followed barometer of expected near-term stock market volatility, rose the most in about 12 weeks.The index ended up 4.93 points at 16.04, the highest level since November 8, when Trump was elected president.

Markets were also lower in Europe and Asia.

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Uncertainty over North Korea also reverberated in the foreign exchange market, where safe-haven currencies such as the Japanese yen and Swiss franc rallied.

Still, prices for gold remain below $1,300 an ounce "because so far there has been a lot of talk, but little action", said Cieszynski.

USA equities steepened their losses late in the session after President Donald Trump said his earlier warnings to North Korea may not have been tough enough.

Investors opted for the perceived safety of US Treasuries, which pushed the yield on the 10-year note three basis points lower to 2.21%. Pan American shares sprang to life $2.24, or 11%, to $22.53.

Biotech companies Celgene and Amgen lost 3.8 percent and 2.6 percent, respectively. The figure showed a decline of 1.1% versus expectations for a 0.5% drop and reversing from a 1.9% gain in May.

The dollar index .DXY , which measures the USA currency against a basket of other major currencies, fell 0.14 percent.

The Canadian dollar fell to almost a 4-week low of 1.2726 against the USA dollar and a 2-day low of 1.4937 against the euro, from yesterday's closing quotes of 1.2694 and 1.4928, respectively.

The overall financials group, which accounts for roughly a third of the index, declined 1.4 percent, while energy shares also fell 1.4 percent as oil prices turned down. The euro fell to $1.1749 from $1.1752.

Later on Friday, investors will look to U.S. July consumer price data for hints on the Federal Reserve's policy outlook and near-term moves in the dollar.

The euro was slightly up against the U.S. dollar to last trade at 1.1754, though the single currency has plunged from the highs of 1.1909 achieved last week following reports showing a strong labor market in the US.

Selling was broad. Declining issues outnumbered advancing ones on the NYSE 6-to-1; on Nasdaq, a 3.60-to-1 ratio favored decliners.

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