By Abhinav Ramnarayan
, if worried about a threatened US Military strike against Iran and a global trade conflict took the edge off a central bank-induced rally from earlier in the week.
The New York Times said U.S. President Donald Trump approved military strikes against Iran on Friday in retaliation for the downgrade of an unmanned surveillance drone, then pulled back from launching the attacks. Iranian officials told Reuters on Friday that Tehran had received a message from U.S. President Donald Trump through Oman warning that in U.S. attack on Iran was imminent.
Worries about possible military strikes persist, and the MSCI world equity index, which tracks shares in 47 countries, fell from a seven-week high, driven mostly by weakness in Asian stocks. A rally by European stocks also faded, though a pan-European index was higher on the day.
"… Market risk hasn't been switched off, it's merely gone dim," said Stephen Innes, managing partner at Vanguard Markets. "However, it does appear to be equity markets and may be suffering from a bit of a hangover after partying up to post FOMC."
A Federal Reserve Open Market Committee meeting this week opened the by to rate cuts in the United States.
Earlier, MSCI's broadest index of Asia-Pacific shares outside Japan solves 0.1
The rose 0.5%, Australian stocks declined 0.6% and Japan's shed 0.8%.
The promise of rate cuts from both the Federal Reserve and the European Central Bank, has kept sentiment strong in stock markets. Wall Street rose to record highs overnight, with the gaining nearly a percent.
But elevations remain elevated, and safe-haven gold advanced to a six-year high of $ 1,410,78 an ounce on Friday, boosted by the geopolitical benefits and the prospect of a U.S. rate cut. At one stage, gold was up nearly 5% on the week.
"While lower real rates in the US and globally make gold more attractive, the metal is being viewed as a cardinal asset to hedge against the scrim of unpredictability like the fear of recession and war," said Saes. Meanwhile, China and the United States are set to trade talks before President Donald Trump and Xi Jinping meet next week in Japan. Hopes of an agreement after the two leaders talked by telephone call, but neither side signaled a shift from positions that led to a deadlock last month.
The Fed's signal that rates were likely brought some relief, but also raised the specter of a global currency was.
On Friday, the dollar fell against a basket of six major currencies to a two-week low of 96,495. The index has shed roughly 1% this week.
The dollar has fallen 1.35% versus the yen this week, reaching a six-month low of 107,045 yen on Friday.
at $ 57.33 per barrel. They had shot more than 5% the previous day after Iran shot down the U.S. drone.