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Crude spikes, dollar slightly weaker as US fires dozens of missiles at targets in Syria

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(CNBC) -

Crude prices spiked, the dollar weakened slightly and markets fell in Asia on Friday and stock futures in the U.S. turned negative after the U.S. fired dozens of cruise missiles into Syria.

The missile strikes happened as President Donald Trump hosts Chinese President Xi Jinping at his Mar-a-Lago resort in Florida.

The dollar index traded at 100.550, after recording a three-week high at 100.77 earlier in the morning. On the energy front, Brent crude futures rose 1.6 percent at $55.77 a barrel while U.S. crude added 1.72 percent to settle at $52.58.

A U.S. military official told NBC that 59 tomahawks had been fired, which hit an airfield near Homs. The missiles hit aircraft and infrastructure including the runway, NBC reported. There is no word on casualties yet, but no people were targeted, the official told NBC.

In a statement, Trump said he had called for the military strike in response to a chemical attack in a rebel-held area in northern Syria. The strike also comes after Trump had said earlier in the day that "something should happen" with Syrian President Bashar al-Assad following the attack that had killed at least 70 people.

In other geopolitical news, Xi arrived at West Palm Beach earlier in the day for the highly anticipated talks that are expected to focus on trade issues and North Korea. Speaking to the media before a dinner with the Chinese president, Trump alluded to positive relations between the two countries, adding that he thinks he will have a "very, very great relationship" with Xi.

Asian markets fell after news of the missile strike broke. Japan's Nikkei 225 was lower by 0.32 percent. The Kospi was down by 0.44 percent, while the ASX 200 declined by 0.27 percent.

Mainland Chinese markets were also in the red. The Shanghai Composite was 0.05 percent lower while the Shenzhen Composite dropped by 0.117 percent. Hong Kong's benchmark Hang Seng Index dropped by 0.94 percent.

U.S. futures fell after the news with Dow Jones futures down nearly 80 points and S&P 500 futures off 9 points, while Nasdaq futures eased almost 21 points. The U.S. 10-year yield hit a low of 2.289 percent, the lowest level since Nov. 22 when the 10-year yielded as low as 2.287 percent.

In corporate news, shares of Japanese retail company Seven & I Holdings, jumped 4.43 percent in early trade after it was reported that Sunoco was selling 1,110 convenience stores to the former. Seven & I Holdings operates the 7-Eleven chain of convenience stores.

Meanwhile, Samsung shares were down 1.15 percent after the company released its first quarter guidance. The company said operating profits are expected to rise by nearly 50 percent on year.

The Reserve Bank of India held its benchmark repo rate steady on Thursday at 6.25 percent but raised the reverse repo rates by 25 basis points to 6 percent. The reverse repo rate refers to the interest rates banks get for deposits with the RBI.

"The hike in the reverse repo is very much related to the after effect of demonetization as there is excess liquidity in the system," said Clive McDonnell, head of equity strategy at Standard Chartered Private Bank, in a CNBC interview.

In other currency news, the yen traded higher against the dollar at 110.27, after snapping six consecutive sessions of strengthening earlier in the session. The Aussie fell to $0.7524, slipping further from the $0.76600 handle at 10:20 a.m. HK/SIN time.

Stateside, equities closed higher, albeit off the highs recorded in the session. The Dow Jones industrial average closed higher by 0.07 points at 2,0662.95 points and the S&P 500 was up 0.19 percent at 2,357.49. An analyst told CNBC that markets were "a bit twitchy" after gains made earlier in the day as plenty could happen within the next 24 hours.

Meanwhile, U.S. weekly jobless claims stood at 234,000 last week, the largest fall in nearly two years.

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