Tension has reached a new high recently as North Korea is stepping up saber-rattling after the UNSC adopted Resolution 2371 that includes a complete ban on its exports of coal, deemed to be a major source of money channeled into its weapons program.
Precious metals gold and silver were trading higher in morning trade on Wednesday amid rising tensions between the United States and North Korea. -North Korea tension. The Swiss franc is a traditional safe haven.
"A combination of softer euro zone economic data, solid USA reports and market positioning all resulted in a markedly heavier tone for the single currency", Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington, said in a note.
Flight-to-safety moves pushed up the value of classic assets perceived as safe, including the franc, the Japanese yen and gold prices after North Korean leader Kim Jong Un made an explicit threat to strike a US military base in Guam.
South Korea's won currency dropped 0.9 percent against the dollar to its lowest close since July 13.
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On the currency front safe-haven demand continues to support both the Swiss franc and the Japanese Yen, with the yen the strongest performer of the G10 currencies over the past 24hrs. Japan is the world's biggest creditor country and there is an assumption investors there will repatriate funds in a crisis.
The Swiss franc, a barometer of risk sentiment, surged 0.6 percent to 0.9688 francs against the US dollar, reversing a two-week losing streak.
At the ARF, North Korean Foreign Minister Ri Yong-ho condemned the latest resolution as a fabrication and threatened to retaliate against the move led by the U.S. Earlier in the day, the North repeated its threats to fire missiles into waters off Guam where U.S. strategic assets are stationed.
The Swiss franc was on pace for its biggest single-day rise against the euro since the Swiss National Bank removed its cap on the currency in January 2015.
German and US sovereign bond prices also rose on the fear trade, sending yields lower despite recent strong readings of economic growth. The yield - or interest rate - on a benchmark 10-year US Treasury bill dropped to 2.24%, while a 10-year German bund was yielding 0.43%.
Spot gold added 1.3 per cent to US$1,277.15 an ounce.